Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

SHEFFIELD GENERAL CEMETERY BILL (By Order)

Order for consideration, as amended, read.

To be considered upon Thursday next at Seven o'clock.

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Agricultural Land

Mr. Dudley Smith: asked the Minister of Agriculture, Fisheries and Food what steps he is taking to preserve the maximum amount of good agricultural land in England and Wales; and if he will make a statement.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): In accordance with the planning procedures local planning authorities are required by article 15 (1) of the Town and Country Planning General Development Order 1977 to refer to my Department all proposals which could result in the development of 10 or more acres of agricultural land. These references are made only where the proposals do not accord with development plans.

Mr. Smith: Is the Minister aware that every five years agricultural land covering the equivalent of a county such as Warwickshire goes under concrete, and that more and more we are losing part of the precious heritage of this country? Does the Minister not think that it is time that there was much more co-opera-

tion among Government Departments to deal with the massive amount of derelict land which still exists in urban areas, so that it can be used rather than building being carried out on good agricultural land?

Mr. Strang: It is the Government's policy to minimise the loss of agricultural land. Co-ordinated with that is the policy which encourages authorities and private individuals to make the maximum use for development of land which does not have a high agricultural potential.

Mr. Speaker: May I appeal for shorter supplementary questions so that we may cover more Questions?

Mr. Ronald Atkins: Is it not true that since the Second World War between 40,000 and 50,000 acres of agricultural land have been lost every year? Is my hon. Friend aware that in spite of the regulations this trend continues? Does he agree that it seems that we are less careful today than we were just after the Second World War?

Mr. Strang: We must keep this matter in perspective. The annual rate of loss is under 0·3 per cent. per annum. My hon. Friend will be the first to admit that many of the developments that take up new land are extremely valuable. They enable families which hitherto lived in tenements to occupy houses with gardens.

Mr. Charles Morrison: Given the very proper emphasis on inner city redevelopment, and given population trends, which will show a fall or certainly a stabilisation in the population, may we be assured by the Minister that he will react very strongly against the references that are made to him which fall outside structure plans?

Mr. Strang: I clearly have to consider each case on its merits, but I am glad of the hon. Gentleman's support for the Government's policy on the inner city areas.

Mr. Welsh: Does the Minister agree that preservation of good farmland also means the improvement of existing farmland? Will he therefore reintroduce the lime subsidy, which produced great benefits in terms of productivity and land improvement?

Mr. Strang: I know that a number of farmers would like the subsidy to be reintroduced. Good farmers, however, will apply lime because they take an interest in their land. Under the farm and horticultural development scheme it is possible to have a programme under which lime is subsidised.

Sheepmeat

Mr. Gould: asked the Minister of Agriculture, Fisheries and Food whether he is satisfied with the developments in establishing a sheepmeat régime.

The Minister of Agriculture, Fisheries and Food (Mr. John Silkin): It is too early to express an opinion.

Mr. Gould: Why do we need a sheep-meat regime? Would it simply not push up the prices to something approaching French levels and mean the virtual disappearance of lamb from the British dinner table? Why are the French not being made to dismantle their illegal system of quotas, rather than being permitted to promote a scheme which would be so damaging to the British consumer and to our traditional supplies?

Mr. Silkin: The "we" about which my hon. Friend asks is a bigger "we" than just those of us in the United Kingdom. It includes New Zealand, for example. The difficulty is that the Commission takes the view that if there were a total free trade, which could or might be the result of the French action in the European Court, there would be high prices in the French market and lower consumer prices here. The temptation would be for producers to sell their lamb in the French market, bringing up the price of lamb in this country. That is the danger that the Commission sees. It needs a great deal of examination. It begs a number of questions. I would have thought that the French market would simply saturate itself at a particular level.

Mr. Peter Mills: Will the Minister confirm that, approximately, for every 1 per cent. rise in the price there is a 1 per cent. decrease in consumption, which can be very serious indeed? In his discussions and negotiations in Brussels, will he seek to urge that the French Government deal with the problem of their own sheep-meat production, as it is a social prob-

lem, with perhaps grants under the less favoured areas scheme?

Mr. Silkin: I think that the hon. Gentleman has more than one point with which I might agree in the course of negotiations. That is why I say that it really is too early to express an opinion. What I would say is that if there is the likelihood—it may be through legal action; I do not know—of our being forced into having some sort of a regime, the regime must, it seems to me, contain a number of elements for the protection of our own people—to protect our own consumers and producers, and to protect New Zealand. For this purpose, I think that one would need a very long transitional period anyway, and one would need to watch it very closely indeed.

Mr. Raphael Tuck: Does my right hon. Friend think that Mr. Gundelach's recent assurance is reliable—namely, that the introduction of a Community regime for sheepmeat will not involve curbing British imports of New Zealand lamb and butter?

Mr. Silkin: What the Commissioner was talking about was the GATT binding, which ensures that New Zealand lamb comes into the Community. Effectively, it comes into the United Kingdom, as we know, with a 20 per cent. tariff. The only way, says the Commissioner, in which one could get rid of that—he would say that this is reassurance to New Zealand—would be by offering an alternative. The only alternative that one could reasonably offer the New Zealanders is to take more butter or more cheese, and neither of these does the rest of the Community want.

Mr. Peyton: Is the Minister aware that his statement of objectives, which he produced only in his reply just now, is perfectly acceptable to me? But what worries many people is that once a regime is established there is no need for unanimity in order to change it. This would be a source of very great anxiety both here and in New Zealand. I hope that the Minister will take every opportunity—I am sure that he will—to remind the Commission that the real objective of the European Community is to strengthen the free world, and that this should not be lost sight of. Hon Members may laugh, but there is nothing ridiculous in


this. This fine objective should not be lost sight of in rather muddy bargaining.

Mr. Silkin: I think that saving the free world is a little outside my departmental remit at present. I think that it is enough to try to save sheepmeat if I can.
I share the right hon. Gentleman's worries. I think that he is on to a good point. As he knows, there are ways and means by which one can say "No", even if one is one of nine. On perhaps one matter, anyway, I think that I have his support. I agree with him that it is a very difficult question. I am very conscious, too, that I shall not always be there. I might have successors.

Mr. D. E. Thomas: Will the Minister accept, on the subject of saving, that he should consider now, in the negotiations, the fact that the guaranteed price system which has operated so effectively for both consumers and producers in the United Kingdom should not be replaced in negotiations on a Community regime?

Mr. Silkin: The guarantee has played a very strong part and I understand it very well. That is why I said at the beginning that it was too early to express an opinion. There are so many facets to this matter and there is so much that we need to save.
While on the subject, perhaps, I may re-emphasise that the main reason for this is that we have more sheep than anybody else in the Community; indeed, more than the whole of the Community put together—and, incidentally, more than the United States and Canada put together. So we have an interest in the matter.

Mr. Stoddart: I am encouraged by my right hon. Friend's remarks, but is he aware that I would have much preferred it if he had made a firm statement that he would not agree to a sheepmeat regime in any circumstances? Does he realise that if a sheepmeat regime were introduced it would adversely affect not only our consumers; it would be devastating to New Zealand farmers and to 30 per cent. of the population associated with sheepmeat, and to shippers and insurance people as well?

Mr. Silkin: I have always had very much in mind the interests of New Zealand as well as those of our own produc-

ers and consumers. I have said many times in the House that the debt that is owed to New Zealand is not just one of history; it is one of kinship and of principle. We have to see that that debt remains paid.

Farms (Letting)

Mr. Farr: asked the Minister of Agriculture, Fisheries and Food what was the number of farms made available for letting in the latest year for which figures are available; and what was the comparative figure five years earlier.

Mr. Strang: No information is available on the number of holdings offered for letting in 1972 and 1977, the latest years for which figures on agricultural holdings are available.

Mr. Farr: I cannot thank the Minister for that reply because it was really a nonevent. However, will he take steps to look into a survey which was conducted very recently in the Border regions, which shows that out of 121 tenancies that expired only four were reoffered to would-be tenants? Will he look at the whole question again and see whether recent legislation on this subject is having a serious impact on the continuance of the valuable role of the tenant farmer in Britain?

Mr. Strang: The hon. Member must recognise that the legislation that provides for a succession of the sons of tenant farmers has the effect of protecting many tenancies which would otherwise be lost. I also point out that inevitably other considerations, such as fiscal ones, are affecting the availability of land for letting. Indeed, this trend has gone on for a very long time.

Mr. Watt: Will the Minister take steps to put an early end to the farm amalgamation scheme, a scheme that is now ensuring that what were once viable farms are being added to neighbouring farms, thus reducing the number of holdings that are available for let or purchase?

Mr. Strang: Clearly, the whole question of the availability of farms for letting, rents, and everything else, is a matter of concern. That is why my right hon. Friend set up the Northfield Committee, which is giving all these issues very deep consideration.

Mr. Jopling: Will the Parliamentary Secretary understand that his first reply gives the impression that he has a blind eye? Is he aware that it is widely known in agriculture that there are now far fewer tenancies? Has he been told of the most helpful initiative that has been taken jointly by the two sides in this problem —the Country Landowners' Association and the National Farmers' Union—in forming a joint committee to try to deal with the problems of shortages of tenancies? Will the Government give an undertaking that they will give sympathetic attention to whatever conclusion that committee might come to whilst the present Government still happen to be in power?

Mr. Strang: What I shall not turn my blind eye to is the fact that, prior to our recent legislation, a man might have invested the bulk of his working life, and the earnings from that working life, in a rented farm, only to find that when his father died he had no rights whatsoever to continue farming that farm. I shall resist any attempt being made by the Opposition or anyone else to make the succession legislation the whipping boy for high rents or anything else in the industry.

Mr. Wiggin: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek an early opportunity to raise the matter on the Adjournment.

Pig Production

Mr. Michael McNair-Wilson: asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the returns being achieved by producers in all sectors of the pig industry.

Mr. Peter Mills: asked the Minister of Agriculture, Fisheries and Food by how much the pig industry has declined, expressed in numbers of breeding sows, since the Government came to power.

Mr. John Sitkin: In April 1974 the United Kingdom breeding herd was 899,000 but was declining sharply and the Government introduced a temporary producer subsidy. Following a recovery in the herd in 1976 a further decline set in last year. The Government introduced a temporary subsidy and has secured

improvements in the basis of calculation of pigmeat MCAs. In April the breeding herd was 830,000 and no longer declining.

Mr. McNair-Wilson: May I press the Minister to give an absolute assurance that in his view the pig breeding herd will not decline again this year? Is he aware of the hardship felt in the heavy hog sector of the industry?

Mr. Silkin: On the second part of that question, I am afraid that it is noticeable that even when there is an upsurge in the other part of the industry, the heavy pig sector seems never quite to benefit as much. This needs a good deal of looking into. I take the hon. Gentleman's point.

Mr. Speaker: Mr. Peter Mills.

Mr. Silkin: I am sorry, Mr. Speaker. I had not finished; I was just pausing for breath.
On the first part of the hon. Gentleman's question, of course I cannot give that unqualified assurance. I can only give an assurance that I will do my best to watch it and see that the herd is preserved.

Mr. Peter Mills: Whatever the Minister says, he must realise that the record of the Socialists in this area is bad. Before the end of July, he must make repeated efforts to get the situation right in Brussels, not only for the pig producers but also for the many thousands of people who work in the processing industry. He cannot be content with his record on this.

Mr. Silkin: I am tempted to ignore your instructions, Mr. Speaker, and speak for rather a long time, but I shall control myself. I took the precaution of looking at the record of two Labour Governments —one in Denmark and one in Germany. I found that the pig herds had increased considerably there—by an average of about 13 per cent. I then looked at two countries with Conservative Governments —France and Italy—and found that the pig herds there had declined. So this is not altogether a matter of political control. I sympathise with hon. Members who do not listen to what their hon. Friend says. He put the emphasis on Socialist Governments, not just this Government. [HoN. MEMBERS: "This


one.") Then there is no need to use the word "Socialist".
If we are in the position that we are over the pig breeding herd, this is due partly to our old friend the pig cycle, but also to the fact that the pig cycle which existed in this country is now part of the European pig cycle—a kind of European bicycle, if you like. If the hon. Gentleman examines the matter he will find that the real villain here is the wrong calculation of MCAs, which the rest of the Common Market insist on our keeping.

Mr. Stoddart: Will my right hon. Friend take it from me that people working in the bacon curing and pigmeat manufacturing sector realise perfectly well that he is doing a good job on their behalf and that they expect nothing from the Conservative Party, because it is so besotted with the EEC? Will my right hon. Friend take into account the real worries of people in the curing and manufacturing industry? Many jobs have been lost, and unless we can get agreements on MCAs, more will be lost in future.

Mr. Silkin: That is precisely the point —my hon. Friend is absolutely right. I have dealt with the question of the producers. The processors are a different cup of tea. That is why we have been pressing for a change in the calculation of the pigmeat coefficients. That will help the processors much more. I have been shocked to find that the Commission, having promised me that this would be urgently studied, has not brought it forward. My hon. Friend raised this point during the last meeting of the Agriculture Council. I think that he received an assurance from the Commissioner that it would be brought forward very quickly.

Mr. Shepherd: With reference to what the right hon. Gentleman said just now, will he take a substantially more aggressive approach towards the reopening of this review of the monetary compensatory amounts? The uncertainty to which this will lead in the industry is far from acceptable. Will he say exactly what he proposes to do on this matter?

Mr. Silkin: That, of course, is precisely what I have done. I am in a slight quandary. I have sometimes had my knuckles rapped for taking an aggressive attitude. I have been told that all I have

to do is smile happily at the Danes for them to give me everything I want. In fact, they give me everything they want. We intend to press this until we get a reasonable solution, but I must warn the hon. Gentleman that it will not be as good as either he or I would wish.

European Community Council of Ministers (Agriculture)

Mr. Molloy: asked the Minister of Agriculture, Fisheries and Food when he expects next to meet EEC Ministers of Agriculture.

Mr. John Silkin: I shall meet them at an informal meeting of the Agriculture Council to be held in Denmark next week.

Mr. Molloy: When my right hon. Friend goes to that informal meeting, will he formally raise the question of the remarkably disparity in, and what seems to many of us the ludricrous disposal of, the Commission's funds for agriculture? For example, £120 million a year is spent on research and investment and £9 million on the food aid programme for the Third World—while storage costs for sugar, skim milk, butter, beef and veal are now running at no less than £900 million a year. Will he raise this matter and express our disgust at the strange behaviour of these people, who are irritating and annoying millions throughout the Community?

Mr. Silkin: I have several times pointed out in the Council that the figure for storage of, I think, £960 million a year—anyway, it is in the budget—is an absolute disgrace to the Community. However, the only way in which it can be tackled is by seeing that the institutional prices come down in real terms, to such an extent that we no longer have the surpluses. When that happens, we shall indeed be on the way to something like a sensible policy.

Mr. Marten: Is the right hon. Gentleman aware that the cost of disposal of the surpluses, most of which are unnecessary, is now £2,425 million a year? How much longer can respectable politicians, and indeed respectable farmers, go on tolerating that?

Mr. Silkin: I agree with the hon. Gentleman. That is a point that I have


made many times. Whatever farmers may think or may have said in the past, I do not think that it is in their interests. Nor do they get the benefit of those storage costs. The benefit often goes to the middle man and the trader, or is simply used as a means of dumping products in competition, for example, with New Zealand or Australia.

Mr. Arthur Lewis: Has my right hon. Friend had any advice, help, suggestions, hints or ideas from the Opposition about what they would do or how they would help? It might be helpful to get some liaison here, if they have any suggestions.

Mr. Silkin: I have had some advice and hints from the Opposition. Indeed, the right hon. Member for Yeovil (Mr. Peyton) and the hon. Member for Westmorland (Mr. Jopling) told me—I must get this absolutely accurate because I had my knuckles rapped the last time I said it—that they were prepared to advocate the parity of the green currencies over the next two or three years—a parity which, for Europe as a whole, would mean an increase in food prices of about 10 per cent.

Mr. Peyton: Is the right hon. Gentleman aware that one of the more deplorable consequences of his Government's policy will be the increasing difficulty which attaches to the parity which we hoped could have been achieved within two or three years? The subsequent decline in the strength of the pound and the lack of any confidence abroad in this Government's rigid policies have made that much more difficult.

Mr. Silkin: I do not know what difficulty the right hon. Gentleman is talking about. We are talking at the moment about the hints and advice that he has given me. I have never heard him retract that advice. If he wants to retract it now, I shall he delighted to hear him say so.

Beef Imports

Mr. Henderson: asked the Minister of Agriculture, Fisheries and Food what was the amount of Irish beef imported since 1st January 1978 to the nearest convenient date; and what was the comparative figure for the corresponding periods in 1974, 1975, 1976 and 1977.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S. Bishop): United Kingdom imports of beef and veal from the Irish Republic between 1st January and 30th April in the five years from 1974 to 1978 were 22,000, 36,000, 18,000, 34,000 and 42,000 tonnes, respectively.

Mr. Henderson: Is the Minister aware that there is considerable concern in the agricultural community about the increase in imports of Irish beef and veal, which come in at a price helped by Ireland's devaluation of the green pound to a greater extent than ours was? Does the right hon. Gentleman understand that our farmers are especially concerned about what may happen this autumn, and will he give an assurance that if there is a larger increase in the import of Irish beef this autumn he will take swift and urgent action to deal with it?

Mr. Bishop: I suggest that the hon. Gentleman should look at the position in full perspective and consider it generally. He will be aware that imports from all sources so far this year are lower than for the same period last year. Imports from Ireland are higher, but the United Kingdom market in recent months has nevertheless remained firm.

Mr. Litterick: Is my right hon. Friend aware that the total estimated net balance of payments cost to the United Kingdom of being forced to buy our food supplies within the Common Market rather than from lower-price world sources is £300 million this year, and this is but one component of the vast net cost of Britain's membership of the Common Market? Will my right hon. Friend assure the House that at least this Government recognise their responsibilities?

Mr. Speaker: Order. Is the hon. Gentleman sure that he is asking his supplementary question on the right Question?

Mr. Litterick: Yes, Mr. Speaker.

Mr. Speaker: I thought that it was one which he could have asked on any Question.

Mr. Bishop: My hon. Friend will be aware of the steps taken by my right hon. Fried with regard to surpluses in trying to get more reasonable levels and also ensuring that the most efficient producer of a commodity produces the food which


we need. Home production of beef and veal was down in 1977 by about 37.000 tonnes on the year before, and I think that my hon. Friend will therefore realise that imports were necessary to top up our own home market.

National Farmers' Union

Mr. Michael Spicer: asked the Minister of Agriculture, Fisheries and Food when he plans next to meet representatives of the National Farmers' Union.

Mr. Temple-Morris: asked the Minister of Agriculture, Fisheries and Food when he next intends to meet the president of the National Farmers' Union.

Mr. John Silkin: I am planning to meet the president and representatives of the National Farmers' Union next month, but a date has still to be fixed.

Mr. Spicer: When the Minister meets the president of the National Farmers' Union will he give him a categorical assurance that the Government have no intention of nationalising agricultural land?

Mr. Silkin: I am meeting the president of the National Farmers' Union and representatives of the union at his request. It will be for the president to ask what he will. If the hon. Gentleman has any influence with him, he will, no doubt, see that that item is put on the agenda.

Mr. Temple-Morris: With respect, I must ask the Minister to answer the question put by my hon. Friend the Member for Worcestershire, South (Mr. Spicer). There has been mention recently in the agricultural Press that the Labour Party is about to come forward with proposals for the nationalisation of land, and wilder and more extreme elements are even hinting that the Minister may have some sympathy with these ideas. I ask him to reassure the House.

Mr. Silkin: I do not think that this has anything to do with what I tell the president of the National Farmers' Union, unless he asks me, but I shall certainly answer the question, irrelevant though it may be. The answer is simple. The Government have no plans to nationalise agricultural land, because it was not in the Labour Party manifesto at the last election.

Mr. Torney: When my right hon. Friend next meets representatives of the NFU, will he ask them to tell him of the latest state of affairs in the bacon curing industry? Will he discuss with them the serious unemployment plight in that industry, due to the Common Market policy of allowing import subsidies on Danish bacon, and, further, will he discuss the fact that there have already been many thousands of redundancies and that we are now threatened with the closure of many firms? Will he tell the EEC that we must act unilaterally to save this industry?

Mr. Silkin: I have a great deal of sympathy with the bacon processors and with those employed in that sector of the industry. In part, the trouble is that, while producer prices have recently been going up—as they have been—that, and the effect of the wrongly calculated Danish MCA's, has caught the processors between an upper and a nether milestone. I think that the change in the MCA rate of about 8 per cent.—£20 a tonne—which, I think I am right in saying, is to come in next week, will make some difference. Whether, therefore, the president of the National Farmers' Union will raise the matter with me, I do not know.

Mr. Wiggin: When the Minister meets Sir Henry Plumb, will he explain to him why it is now impossible for a young man to find a farm to rent, and will he further explain that, although nearly half the front page of the annual June return deals with the change in the occupancy of farms, his hon. Friend the Parliamentary Secretary still does not know how many farms are let each year? Will the right hon. Gentleman refute the idea that the Ministry does not know, since it does know?

Mr. Silkin: I greatly doubt that the opportunity will be given to me to discuss that with the president of the National Farmers' Union. But I should say that he and his union have given their evidence to the Northfield inquiry. The first sentence of the hon. Gentleman's supplementary question expressed precisely why, a year ago, I set up the Northfield inquiry to find out exactly what has happened in the acquisition and ownership of agricultural land. Nobody knows, save for whatever evidence has already been accumulated by the Northfield Committee.

Mr. Roderick: Will my right hon. Friend take special note of any representations which may be made on behalf of producer-retailers of milk and on the sale of untreated milk? Will he adopt a flexible approach to this problem, since there are isolated pockets in this country where no doorstep delivery will take place if these people are forced out of business?

Mr. Silkin: I want to be as flexible as I can on this matter and I have tried to meet the point which I take my hon. Friend to make. I did it by extending the necessary consultations until the end of next month. I wish to put the position absolutely fairly to the House and the industry. If I, as Minister of Agriculture, Fisheries and Food, am aware, as I am, that there have been about 384—I think that that is the figure —cases of disease as a result of untreated milk, I am clearly under a duty to examine the matter and say what I ought to do. I have asked for all the evidence I can get. I hope that doctors, farmers and consumers will get in touch with me. That is precisely why I extended the period for the consultations.

Mr. Wells: I hope that when the Minister meets the president of the NFU part of his discussions will be concerned with horticulture. In particular, will he talk to Sir Henry about the problems of Stratford market, which are uppermost in the minds of many hon. Members who have visited that market in recent weeks?

Mr. Silkin: I believe that if the hon. Gentleman—he is my Member of Parliament, although he rarely, if ever, gets my vote—were to write to me about that, I might be well briefed to talk to Sir Henry on the matter even if he does not raise it with me.

Fishing Rights

Mr. Clegg: asked the Minister of Agriculture, Fisheries and Food what is the current state of negotiations concerning reciprocal fishing rights with third countries.

Mr. David James: asked the Minister of Agriculture, Fisheries and Food when he will introduce conservation measures under the Fisheries Limits Act 1976.

Mr. John Silkin: I shall be making a statement about the outcome of this week's Fisheries Council after Question Time.

Mr. Clegg: We look forward with interest to what the right hon. Gentleman has to say, but may I put to him a question which is not directly concerned with the EEC? There are reports that Argentina has granted West Germany and Japan permission to fish in the waters off the Falkland Islands. As the right hon. Gentleman well knows, that area has been looked to as a possible British resource. What has he to say on the subject?

Mr. Silkin: The point that the hon. Gentleman raises about the exploitation of the South Atlantic waters around the Falkland Islands was raised in the fisheries debate last week, and I then said that the Government were considering the advisability and technical appreciation of the advantages. I shall look into the reports which the hon. Gentleman has just drawn to my attention. During the course of this week, I confess, my eyes have been on a slightly different form of 200-mile limit, but I shall certainly look into the matter and consider whether there is anything I need to do.

Mr. James: Since we have been overtaken by events in the past 24 hours, will the Minister tell the House whether, having failed to achieve agreement during his June meetings, he has the firm intention to reach a successful conclusion in July?

Mr. Silkin: There is always the possibility of a successful conclusion to a fishing agreement provided that our partners in Europe, the majority of whom do not fish in our waters anyway, realise four things. The first is that fishing, to us as an island people, is something that is of far more importance than it is to any of them. Secondly, our partners must recognise that the conservation of stocks of fish is vital if we are to have a viable fishing industry. Thirdly, it must be recognised that, as a coastal State, we must have the means of enforcing the quotas which other members of the Community so glibly throw around the table. Fourthly, it must be recognised that we —as the coastal State which has brought in the largest share of waters containing fish for which Community fishermen as


well as ourselves fish—are entitled to a preferential share of that fish.

Several Hon. Members: rose—

Mr. Speaker: Order. There will be an opportunity for questions following the Minister's statement.

Fruit and Vegetable Prices

Mr. Kenneth Lewis: asked the Minister of Agriculture, Fisheries and Food whether he is satisfied with the prices to the consumer of fruit and vegetables; and what plans he has for avoiding large increases in price after these products leave the farm gate.

Mr. Strang: Prices of fresh fruit and vegetables are determined largely by supply and demand, but the Price Commission monitors both prices and margins in this sector. Its most recent report shows that retail prices of the main fruit and vegetables were down 22 per cent. in April compared with a year earlier; the average retail price of all food rose by 6·3 per cent. over the same period. The Government have no plans to introduce controls in this sector.

Mr. Lewis: Is the Minister aware that his reply will be regarded as complete nonsense by the average housewife, who knows that the price of food and vegetables in past weeks has been escalating? Is the Minister further aware that it is known that these price increases are not going to the producer but are benefiting those somewhere in the middle?

Mr. Strang: Perhaps the hon. Gentleman did not hear every detail in my reply. The figures that I quoted were to April. The hon. Member is right to say that there have been significant increases in the prices of some vegetables of late, but I believe that these are largely seasonal, due to the late spring.

Icelandic Fisheries

Mr. Brotherton: asked the Minister of Agriculture, Fisheries and Food if he will make a statement about negotiations with the Government of Iceland on the subject of fishing rights.

Mr. John Silkin: No negotiations have taken place since a joint EEC Commission/Presidency team visited Reykjavik in June last year.

Mr. Brotherton: In view of what has happened this week will the Minister assure us that we shall now negotiate bilateral agreements with Iceland and the Faroes so that the British fishing industry is able to fish in the waters it requires?

Mr. Silkin: I remember that during the passage through this House of the Fishery Limits Act the right hon. Member for Down, South (Mr. Powell) asked me "Why are you letting Mr. Gundelach negotiate for you?" I said that it was because I thought that it was only fair to let him have his head since he was negotiating for a number of countries and it seemed that if we were negotiating separately we might not get such a good deal. As I look back on a year of total futility over the Iceland negotiations I think that I would want to look at my words again to see to what extent I would like to revise them in June 1978.

Pigmeat

Mr. Boscawen: asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the profit margins being achieved by the United Kingdom bacon curing industry.

John Silkin: I refer the hon. Member to the reply given today to the hon. Member for Harrogate (Mr. Banks).

Mr. Boscawen: Does the right hon. Gentleman realise that his lack of sympathy and his insufferable complacency with regard to the pigmeat industry gives that industry no confidence that he is pressing its case as hard as he should in Brussels?

Mr. Silkin: I am a little astonished by that remark. When I introduced the pig subsidy last year, when I had to fight the various sections that I did have to fight inside the Community because of that, and when I had to try to get the pig-meat MCAs recalculated, "complacent" was not exactly the word being used by the Opposition or by people in Europe. If the hon. Gentleman means that we have to keep fighting for a recalculation of pig-meat MCAs, I agree. He is perfectly correct, and we shall do so.

Mr. Peyton: Will the right hon. Gentleman bear in mind that the food processing industry finds itself between the upper millstone of the MCAs and the


nether millstone of the Price Commission, which often has no knowledge of or sympathy with the problems of the industry? Is he aware that the likely consequence of this process will be the grinding out of an efficient British industry and its replacement by foreign supplies?

Mr. Silkin: The lower millstone in this instance—to preserve the analogy—is the British producer, rightly so. He deserves a fair return for his products. The upper millstone, as the right hon. Gentleman correctly says, is the wrongly-calculated system of MCAs. This, at least, is one small matter on which he and I have had some agreement this afternoon.

Mr. Wm. Ross: Is the right hon. Gentleman aware that if we were allowed to import grain at world prices from our traditional suppliers many of the problems of the pig producer would disappear?

Mr. Silkin: I have to deal with matters as they are. I try to do the best I can in those circumstances and I shall continue to try to do so.

PRIME MINISTER (ENGAGEMENTS)

Mr. Temple-Morris: asked the Prime Minister if he will list his official engagement for Thursday 22nd June.

The Prime Minister (Mr. James Callaghan): This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others.

Mr. Temple-Morris: Has the Prime Minister time today to answer a question unconnected with statistical entrails? May I put it to him that whether phase 3 ultimately succeeds or fails, it has definitely failed with regard to differentials and the skilled labour force? Is he aware that in this and in his other policies he has let down a large number of his own supporters? Does he agree that the only hope that those people have lies with the policies that will be put forward by the next Conservative Government?

The Prime Minister: I hope that the skilled workers will not have to wait as long as all that. It is true that when there are rigid systems of pay policy dif-

ferentials suffer, as they have done on this occasion. I hope that in the succeeding rounds—in the yearly pay bargaining —this position can be improved. We must recognise skill as far as possible.

Mr. Roy Hughes: May I ask the Prime Minister, if not today, at any early date, to enter into negotiations with the trade union movement and the CBI over the practicability of introducing a 35-hour week throughout Great Britain, as a means both of increasing leisure hours and of significantly reducing unemployment, which, by common consent is far too high?

The Prime Minister: These matters will, of course, be for discussion with the trade union movement, but I do not think we should assume that there is an easy solution to our problems through adopting a 35-hour week unless a number of other factors go with it. Two factors, for example, would be the need to ensure that unit costs of production do not increase. The second would be to ensure that our European competitors—since we have to sell our goods abroad—would be following the same policy. Apart from that, I think that there is a good case for considering reductions in working hours, provided that they do not just result in more overtime payments.

Mrs. Thatcher: Now that school leavers are coming on to the employment register in ever larger numbers, may I ask the Prime Minister whether he is still determined to go ahead with his 2½ per cent. extra tax on jobs?

The Prime Minister: As the right hon. Lady knows, the necessity for this surcharge arose from the amendments for which she voted. It was no part of the Government's original strategy to introduce this tax. We asked the House to reject the amendments which altered the balance of the Budget. However, we have to face the consequences. As to whether we go ahead, the amendments will be put forward when we debate the Finance Bill. The House will have to debate these matters in the usual way. I am sure that the right hon. Lady appreciates that.

Mrs. Thatcher: There seems to be some doubt whether the Prime Minister will go ahead with this. Does that mean


that he is prepared to listen to the CBI and the small businesses when they tell him that such a tax would knock jobs, exports and small businesses?

The Prime Minister: I wish the right hon. Lady had thought of all these things before she voted for the amendments. I would not need to stand here defending this impost if the Opposition had not unbalanced the Budget by their votes. As it is, we have had to find the best way possible—

Mr. Farr: The worst way.

The Prime Minister: —to restore the revenue that the Opposition have lost through their votes. I shall listen to any representations that are made. I must say that when I meet the CBI its members do not bay and shout at me as do Tory Members.

Mr. Wyn Roberts: asked the Prime Minister if he will list his official engagements for 22nd June.

The Prime Minister: I refer the hon. Member to the reply which I gave earlier today to the hon. Member for Leominster (Mr. Temple-Morris).

Mr. Roberts: In view of the impending sharp increases next month in youth unemployment, because of the number of school leavers joining the register, does the right hon. Gentleman agree that the Chancellor of the Exchequer's choice of a 2½ per cent. increase in employers' national insurance contributions is positively the worst choice that he could have made as far as the employment prospects of these young people are concerned? How will the Prime Minister justify this inflationary tax on jobs to his fellow heads of Government at the July Summit?

The Prime Minister: If we had really thought that it was the worst choice, I promise the hon. Gentleman that we would not have made it. There is a matter for a difference of opinion here. Because we are seeking to fight inflation, I was myself very opposed to raising value added tax, which was another alternative and which would have had a much more immediate effect than the national insurance surcharge will have, since it would have come into force immediately. [HON. MEMBERS: "Ah!"]

It is no use hon. Members saying "Ah". We are about to engage in discussions with the trade union movement on what is to happen to pay next year.
In my view, it really would have been a worse choice to say to the trade unions "We are now going to increase VAT because of the votes in the House of Commons, and in doing so shall put up the cost of living immediately". There is no good choice here, and Opposition Members must accept their full responsibility for the choice that we have had to make.

Mr. Molloy: During the course of the day, will my right hon. Friend make arrangements to meet the TUC and CBI in order to make very clear that the Conservative Party's interference with the Chancellor's Budget will mean that very well-off people will get more in tax relief than the amounts which some workers are asking for in order to meet the marginal costs in the rising standard of living? This will create a severe and sour atmosphere in industrial relations, and the CBI should state quite clearly where it stands and whether it will aid and abet the Conservative Opposition in their efforts to sour industrial relations.

The Prime Minister: There is a way out of this dilemma, if the Opposition will undertake to vote for amendments which will return income tax to the position where it was. Then we need not proceed with this national insurance surcharge. Which do they want?

DEPARTMENT OF MARINE AFFAIRS

Dr. Edmund Marshall: asked the Prime Minister whether he will establish a Department of Marine Affairs.

The Prime Minister: I am grateful for my hon. Friend's suggestion, but he may assume that I do not intend to make any changes in departmental organisation or responsibilities unless and until I make a statement to the contrary.

Dr. Marshall: When so many of our urgent political problems associated with the sea—problems relating to fishing, tanker disasters, oil development and hydrography—involve so many Government Departments and agencies, would


they not be dealt with more effectively within a single new Department?

The Prime Minister: It is a matter of judgment. I have considered the matter very carefully. In 1976, we made a thorough review of it. The fact that these activities extend so widely over a number of Departments means that they require co-ordination, which is done by the Lord Privy Seal at present. I am not yet persuaded that setting up yet another Ministry would add to the co-ordination, but I want to keep an open mind. If it seemed necessary to bring them together I would not hesitate to do so.

Mr. Grimond: Without necessarily setting up a new Department, will the Prime Minister look again at the chain of responsibility for dealing with pollution at sea to see whether there should be one senior Minister in ultimate control? What proposals are the Government making internationally to avoid the sort of disaster that overtook the "Amoco Cadiz"?

The Prime Minister: The Lord Privy Seal has an overall responsibility for coordination where a number of Departments are involved, but basically, of course, this matter falls to the Department of Trade, which is now responsible for our marine interests generally.
The right hon. Gentleman referred to the "Amoco Cadiz" and other disasters. First, I have asked that a full report should be prepared on the "Amoco Cadiz" disaster and the "Eleni V" incident—although "disaster" is probably better word to use—and when we have considered that report we shall consider whether the matter is best raised through the Inter-Governmental Maritime Consultative Organisation or through the European Council. Either might be appropriate.

Mr. Hooley: Does my right hon. Friend agree that the creation of a 200-mile exclusive economic zone creates a new situation and that the structure of government needs to be revised so that we as a nation can take advantage of the enormous riches below the sea bed which this possibility gives to us?

The Prime Minister: My previous answer covered that. I am not persuaded that it needs a new Ministry to

do this. When the 200-mile zone looked as though it were being extended, I reviewed the whole matter and gave an answer in the House, saying what steps were being taken to ensure that there was proper co-ordination so that we could make certain that our interests were properly safeguarded.

Sir Bernard Braine: Has the Prime Minister yet studied the Health and Safety Report on the terrifying risks of death and injury to which my constituents are exposed, including risks arising from the possible interaction of accidents to liquid gas, oil and chemical carriers and land-based hazardous installations? Has the right hon. Gentleman noted the lunatic proposal of that report that despite these risks oil refinery development on Canvey should be increased? Will he, therefore, take responsibility for these matters out of the hands of Departments which have hitherto been indifferent to the plight of Canvey and entrust them to a new Department?

The Prime Minister: I understand the hon. Gentleman's concern for his constituents, but I do not think that the establishment of a new Department of Marine Affairs would be likely to solve these problems. Perhaps he had better table a Question to the appropriate Minister.

FAMILY POLICY

Mr. Michael Latham: asked the Prime Minister whether he intends to take any further personal initiatives in the field of family policy, following his recent speech on this subject.

The Prime Minister: I have at present no general comments to add to my recent speeches on the importance of family life, but Ministers, in developing the broad range of their economic and social policies, will pay particular attention to the contribution that improved provisions for the family and protection of the family can make to a healthy community.

Mr. Latham: When the Prime Minister next speaks about family policy, will he remind his audience that when the Conservative Government left office the standard rate of income tax for working wives and working husbands was 30 per


cent., and that the first thing the incoming Labour Government did was to raise it to 35 per cent.?

The Prime Minister: All these facts are well known. The hon. Gentleman never fails to seize the opportunity to put them on record. But, to give a balanced picture, I should remind the audience, at the same time, of the considerable improvement in child benefits, which will go up to £3 in November and £4 in April; I should remind it that social security benefits have been substantially improved; I should remind it that there has been a larger increase in the married man's allowance than for the single person; I should remind it of the levelling up of the personal allowances for single parents; I should remind it that we have reintroduced free school milk. I should remind it that we have expanded the health visitor service; I should remind it of the improvement in nursery education. When I had done that, I think that it would have a balanced view of the whole picture.

Mrs. Hayman: When my right hon. Friend gives that long list of reminders, will he consider also reminding his audience of the broken Conservative pledges to increase family allowances in the past? More constructively, when considering initiatives in family policy, will my right hon. Friend look particularly at the needs of the under-fives and consider whether there could not be better co-ordination between the Departments involved in order to improve services for pre-school children?

The Prime Minister: There is a great deal that should unite the parties on this matter, and I should regret it if it became a matter of politicisation. The Campbell Adamson report and study set up under the Leverhulme Trust will be of great value. The debate introduced by the hon. Member for Woolwich, West (Mr. Bottomley) in March, supported by my hon. Friend the Member for Eccles (Mr. Carter-Jones), is worth reading by all of us, and there is a great deal that we should seek to preserve in the family in trying to put the family forward and amplifying its status in society—and that has nothing to do with politics.

Sir David Renton: As this is mental handicap week, may I, in a non-party spirit, ask the Prime Minister to do his

best to encourage all concerned, especially the Secretary of State for Social Services, in the efforts being made to get the older handicapped people out of large institutions and into living a more feasib!. life in the community?

The Prime Minister: I am much obliged to the right hon. and learned Gentleman for that suggestion. I shall convey it to my right hon. Friend and see that the right hon. and learned Gentleman gets a reply to it.

Mr. Sever: In the light of my right hon. Friend's probable reluctance to set up a separate Ministry to deal with these affairs, could he indicate to which Ministry he will wish to allocate further responsibilities for the development of his policy on the family?

The Prime Minister: Again, this is a matter of co-ordination, because, as I have indicated, the question of families, their responsibilities and activities, stretch over a number of Ministries. We cannot look to any single Minister to be responsible. It is a matter for the Cabinet and for Government coordination generally.

Mrs. Bain: In view of the Prime Minister's reference to the increase in child benefits, will he look particularly at the case of those lone parents who are totally dependent on supplementary benefits, and are less likely to benefit from the increases than those who are dependent on unemployment benefit and maternity allowances?

The Prime Minister: I understand the problem, but the Supplementary Benefits Commission must take into account income from all sources, and if child benefits are to be substantially increased, as they are, supplementary benefits must have regard to that. My right hon. Friend is looking into this problem, but I can give no undertaking.

BUSINESS OF THE HOUSE

Mrs. Thatcher: May I ask the Lord President to state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:


MONDAY 26TH JUNE—Supply [25th Allotted Day]: a debate on trade and the prosperity of the nation.
TUESDAY 27TH JUNE—Remaining stages of the Employment (Continental Shelf) Bill, of the House of Commons (Administration) Bill and of the Parliamentary Pensions Bill.
WEDNESDAY 28TH JUNE—Motions On EEC documents on contracts negotiated away from business premises, Nos. R/113/77 and R/134/78, on the aeronautical sector, Nos. R / 2461 / 75, R/1860/76, R/222/77, and R/1964/77 and on criminal law, No. R/2043/76.
Motion on the Ancillary Dental Workers (Amendment) Regulations.
THURSDAY 29TH JUNE—Supply [26th Allotted Day]: until 7 o'clock a debate on the problems of pharmacists.
The Fourth Report from the House of Commons (Services) Committee, Session 1977–78, House of Commons Paper No. 472 on Members' Secretaries and Research Assistants (Severance Payments &c).
The Chairman of Ways and Means has named opposed Private Business for consideration at 7 o'clock.
FRIDAY 30TH JUNE—Motions On the Northern Ireland (Emergency Provisions) Act 1978 (Continuance) Order and on the Northern Ireland Act 1974 (Interim Period Extension) Order.
MONDAY 3RD JULY—Supply [27th Allotted Day]: subject for debate to be announced.

Mrs. Thatcher: May I put three brief questions to the Leader of the House? First, he will be aware of the continuing dispute between the electricians and the Health Service and will probably have seen reports in the Press today about the situation at Great Ormond Street where heart surgery is having to be postponed. Will he undertake that the Secretary of State keeps the House fully informed about the latest developments? Secondly, as we are now one further week on than last week—[HON MEMBERS: "Oh".]Well, it has given the right hon. Gentleman one more week to decide—has he decided whether the limit on dividends will not be reintroduced when it expires shortly? Thirdly, when may we expect

the report on police pay and a statement upon it?

Mr. Foot: I cannot say exactly when the report on police pay will be coming, but it will be very soon. With regard to dividend control, to which the right hon. Lady referred last week, the Government have not made a final decision, but we do not believe that it will be necessary to have fresh legislation on the matter. With regard to the right hon. Lady's first question, I shall consult my right hon. Friend with regard to informing the House. Of course, we are aware of the importance of the whole question.

Several hon. Members: rose—

Mr. Speaker: Order. Before I call anyone, may I remind the House that today two short debates are to be initiated, one by the Scottish National Party and one by Plaid Cymru. Therefore, I shall have to limit the time devoted to business questions. In addition, a major statement is to follow, and that will take some time.

Mr. Mellish: Will my right hon. Friend make a statement next week about the salaries of Members of Parliament? As ever, we are the last in the queue. I think that the time has come for the increase. Will he say when? Will he make it next week?

Mr. Foot: We shall be bringing before the House very soon, although not next week, the resolutions required to carry this through. But, of course, the date of the increase will be 13th June, which is a date similar to last year.

Mr. Hordern: Will the Leader of the House once again repeat what he said to my right hon. Friend the Leader of the Opposition about dividend control? He said that there would be no need for further legislation. By that did he mean that there would be no further dividend control?

Mr. Foot: I said I did not believe that there would be any necessity for fresh legislation. The Government are still considering the matter, but I am not yet in a position to say how we shall make a statement to the House.

Mr. Greville Janner: Will my right hon. Friend confirm the reports that before the end of this month there is to


be a Green Paper of the problems of the elderly which will recommend a lowering of the voluntary retirement age for men to 63? In view of the great importance of this subject, can he assure the House that there will be time for a debate on retirement before the House goes into recess?

Mr. Foot: My hon. and learned Friend had better wait to see the Green Paper before he or I make comments upon its recommendations. When the Green Paper is presented to the House, the House will then be able to consider whether it wants a debate at an early date and, if so, whether there is time for it.

Mr. Raison: Will the right hon. Gentleman arrange for a statement on the rather lamentable industrial action being taken by Post Office telephone engineers which is causing grave inconvenience to many of my constituents and to many other people in the country? Up to now it has been an example of people taking industrial action, not doing the job for which they are paid, yet getting fully paid for it.

Mr. Foot: I cannot comment on what the hon. Gentleman has said about the particular aspect of the dispute, but I shall certainly consult my right hon. Friend about whether we should have a statement.

Mr. Helfer: In view of the fact that the hon. Member for Abingdon (Mr. Neave) has suggested that the Labour Party wants to bring in a Nazi-type system, the right hon. Lady the Leader of the Opposition has suggested that we want to bring in an East European-type system, and the spokesman on Scottish affairs has suggested that we are all Nixonites, is it not time that we had a debate so that we could clearly explain the democratic socialist concepts of the Labour Party? If the Conservative Opposition are not prepared to have such a debate on a Supply Day, as they are obviously not prepared to have a debate on immigration, could not the Government find time for a discussion on this matter?

Mr. Foot: I am sure that the hon. Member for Abingdon (Mr. Neave) must be thoroughly ashamed of the statement which he made. I think that much the

kindest thing which the House can do—I know what a kind heart my hon. Friend has—is to say nothing more about it. I am sure that the right hon. Lady would be the first to agree with me.

Mr. Biffen: Is the Leader of the House aware that his statement on dividend control may have given rise to some unintended confusion? Can he confirm that without further legislation the existing controls lapse? Therefore, the only interpretation which can be put on his remarks is that any future dividend control will be a matter for a voluntary code and not a statutory one.

Mr. Foot: The hon. Gentleman should put no such interpretation on the words that I used. The words that I used were not those which he put into my mouth. A statement will be made at the appropriate time. A number of factors have to be carefully considered as part of the Government's general approach to counter-inflation, and I am fully aware of the third factor, mentioned by the hon. Gentleman, about 31st July.

Mr, Alan Lee Williams: Will my right hon. Friend consider a debate before the recess on the report of the Select Committee on waterways and canals?

Mr. Foot: I must tell my hon. Friend and the rest of the House that we have considerable pressure on the Government's time before the recess. Therefore, I cannot make any promises on the subject. I shall have to say the same, I fear, to quite a number of right hon. and hon. Members today and on the one or two other occasions which will occur before we reach the recess.

Several Hon. Members: rose—

Mr. Speaker: I propose to allow business questions until a quarter to Four.

Mr. Baker: Will the Leader of the House clarify what he said about the continuing powers which he may seek to extend dividend control? It is the general assumption that substantive legislation is needed for this. He said that substantive legislation would not be required. Is it the Government's intention to introduce the extension of dividend control by means of an additional clause to the Finance Bill?

Mr. Foot: There are various possibibilities. I have nothing further to add to what I have said already in response to the Leader of the Opposition and the hon. Member for Oswestry (Mr. Biffen).

Mr. Arthur Lewis: The Leader of the House will be aware that on Thursday of last week the Government promised a White Paper on what I call freedom of information but what my hon. Friend would probably call the Official Secrets Act. Is it to come next week or the week after? Time is getting a little short, is it not?

Mr. Foot: It is true that time is getting a little short, but I cannot say whether it will be next week or the week after.

Mr. Arthur Lewis: is it a secret?

Mr. Foot: I can assure my hon. Friend that there will be a White Paper on the subject before the recess.

Mr. Spearing: When does my right hon. Friend intend to table the motion about tomorrow's business on the EEC European Foundation for the furtherance of European union? Are the Government in favour of this concept? If not, will they oppose the proposal?

Mr. Foot: For the debate on the subject which takes place tomorrow, the Government are proposing a "take note" motion. I think that we should see how we get on then. But I understand fully the representations on the subject which my hon. Friends have made to me.

Mr. Sims: The right hon. Gentleman said that we should be discussing the Fourth Report of the Services Committee next week. Does he recall that the Fifth Report deals with the new building for Parliament? In view of the very important decisions to be taken and the need for them to be taken at an early date, will he assure us that we shall have an opportunity to debate that report before the recess?

Mr. Foot: I know the interest of the hon. Member and others in the subject, but I fear that I cannot give an absolute promise that we can debate it at an early stage. I know the desire of the House to discuss it, but I have to underline what I said in response to my hon. Friend the Member for Hornchurch (Mr. Williams) about the pressure on the business of the

House, and that must be taken into account, too.

Mr. Gould: As we approach the end of the Session, is my right hon. Friend aware that he has not yet fulfilled his undertaking to bring forward a resolution to improve parliamentary control over EEC legislation? When does he intend to do that?

Mr. Foot: I am fully aware of the undertaking which I gave on that subject and of the necessity for the House to discuss the matter.

Mr. Eldon Griffiths: Will the Leader of the House make clear the position on police pay? Is it intended that the Edmund-Davies report will be published with a statement by the Home Secretary at the same time, or will there be a gap? Secondly, as this will touch on many matters besides pay, will there be an opportunity for a debate before the House rises?

Mr. Foot: We had better wait and see what is in the report before I can answer those questions. Whether the House will want a debate, whether there will be time for a debate and what should be the nature of that debate are matters that we must consider when we have the report and the Government's statement on it.

Mr. Ioan Evans: When my hon. Friend the Member for Liverpool Walton (Mr. Heifer) referred to the speech of the hon. Member for Abingdon (Mr. Neave), the Leader of the Opposition laughed. Will my right hon. Friend ask the right hon. Lady to dissociate herself from that speech, because it caused a great offence to those millions of people who came back from the last war—

Mr. Speaker: Will the hon. Member ask a question on the business for next week'?

Mr. Evans: The question is whether we could have an opportunity next week for the Leader of the Opposition to make her position plain regarding that offensive speech.

Mr. Farr: May I ask the Leader of the House whether it is true that next Friday we shall discuss on a Northern Ireland day a Bill which will be published by then on the implementation of the recommendations of Mr. Speaker's Conference


on Northern Ireland? If not, why will not the Bill be ready by that date?

Mr. Foot: I think that the hon. Member knows the answer to his own question. If he has followed the answers that I have given on previous occasions on this subject, he will know perfectly well that we are not proposing to deal with that next Friday. There is other business concerning Northern Ireland to be dealt with then.

Mr. Kilroy-Silk: Will my right hon. Friend provide time next week to debate the scandal of the Tory Party opposing every job creation and job saving measure proposed in this House and then taking £11,000 for itself from the job-creation scheme? Apart from the customary hypocrisy that this demonstrates, does my right hon. Friend consider it appropriate for taxpayers' money to be paid to a political party of that kind?

Mr. Foot: That is a somewhat wider question, but I dare say that many of these aspects of the attitude of the Conservative Party to real job creation schemes will arise when we return to our discussions in the House on the Finance Bill.

Several hon. Members: rose—

Mr. Speaker: I am a friaid that we must move on.

EUROPEAN COMMUNITY COUNCIL OF MINISTERS (FISHERIES)

3.45 p.m.

The Minister of Agriculture, Fisheries and Food (Mr. John Silkin): With permission, Mr. Speaker, I should like to report to the House on the outcome of the Council of Fisheries Ministers held in Luxembourg on 20th and 21st June.
I represented the United Kingdom at this meeting, together with my right hon. Friend the Secretary of State for Scotland and my hon. Friend the Under-Secretary of State for Scotland.
In a discussion on revising the common fisheries policy, I again emphasised the political and economic importance of the fishing industry in the United Kingdom and the strength and unanimity of feeling expressed in this House during the debate on 15th June. I regret to say that. despite the willingness the United Kingdom has

shown to be flexible in the search for an agreement, the other members of the Community showed no readiness to depart from the position they had adopted at the Council meeting last January, and consequently no progress could be made.
The Council also discussed two issues of immediate importance. It agreed to roll forward for July the present reciprocal fishing arrangements with third countries subject, however, to a quota arrangement at Northern Norway which will help to ensure that the United Kingdom maintains its share of the cod and haddock catches in that area and that over-fishing by other countries will be contained.
The Council, however, failed to agree on a Commission proposal to introduce a ban on further catches of herring to the west of Scotland. There is clear, independent, scientific advice that this stock, which is of the highest importance for the future of our herring industry, is in danger. The Government will therefore now have to consider urgently what must be done to protect it.
I informed the Council that Her Majesty's Government would now have to decide, in the light of the Community's failure to take the necessary decisions, on what further action we needed to take in accordance with our rights and obligations as the coastal State, to protect and conserve the fish stocks in United Kingdom waters.

Mr. Peyton: First, may I ask the right hon. Gentleman whether he is aware of the Opposition's complete agreement with him—[Interruption.]—in resisting proposals which are wholly unacceptable, ill-founded and intrusive? May I also express to him our regret that the Commission does not yet seem to have recognised the primary importance of conservation?
I should like then to ask the right hon. Gentleman whether, in view of the fact that the failure to agree was predictable—indeed, he predicted it himself—he is aware that there will be some disappointment that he has not come here today already prepared with definite measures of conservation—[Interruption.]—with the intention of putting them into force at once.
But, despite the barracking of his hon. Friend the Member for Liverpool, Walton (Mr. Heffer)—a little silence from


him would be so rewarding—may I ask the right hon. Gentleman whether he will undertake to come to the House of Commons next week and announce measures such as those which we recommended to him last week to conserve fish stocks and also to make it quite clear that these will be put into effect immediately?

Mr. Silkin: I am grateful to the right hon. Gentleman for the agreement which he signifies to the stand that I took in Luxembourg. It was in accordance with our debate on 15th June, when all of us, I think, agreed that it would be a matter of some surprise to me if there were not those around the Council table who thought that the agreement would not be as lasting as in fact it may be. I think that it is lasting, and I hope, therefore, that I speak for the whole House and the country.
On the question of conservation, as I said to the House before, obviously it is better to get conservation measures that embrace the whole Community. Indeed, if we could get agreement beyond the Community and have, for example, reciprocal arrangements among Norway, Iceland, the Community, ourselves and all other countries, it would be better. For that reason I was hoping that we might get some Community conservation measures. Unfortunately that failed. In fact the Commission tried, but the member States refused to allow the herring conservation measure to go forward.
It is not a question of not knowing what should be done. We know pretty well exactly what should be done. But we have to follow a certain procedure, and the right hon. Gentleman must be aware of that. We shall follow that procedure and we shall announce to the House at the earliest possible moment what conservation measures we intend to adopt after we have followed the correct procedures. I promise the right hon. Gentleman that we shall do it as soon as we possibly can. Obviously I am covering myself a little because I have to wait until I hear what reply I get after seeking the Commission's approval in Brussels.

Mr. Peyton: I really must press the Minister on this matter. He cannot plead

surprise. He knew for an absolute certainty that no agreement would be forthcoming in Luxembourg. We now repeat the question that we put to him last week —will he undertake quite clearly to come to the House of Commons next week with prepared measures and then put them into immediate effect?

Mr. Silkin: I thought that the right hon. Gentleman understood what I said, but clearly he did not. I did predict that there would not be an agreement. Both he and I agreed on 15th June that if we could get an agreement that served our national honour and our interests we would be glad to get it. What I did not know—and I said that to him at the time—was that conservation measures were not necessarily part of that agreement on the common fisheries policy. The Commission was prepared to and, in effect, did introduce proposals on conservation, but I did not know until the last moment whether those measures would be accepted by the rest of the Council. It is better to have a Community conservation measure because it is more extensive than a national one.
In the light of that I still say that I would have had to go through the same procedures even had I known that the talks would fail. I have to go through the procedures because I want to ensure that the measures are effective. The House will be informed at the earliest possible opportunity, and I assure the right hon. Gentleman that there will be no delay.

Several Hon. Members: rose—

Mr. Speaker: May I ask for crisp questions if possible?

Mr. McNamara: Is my right hon. Friend aware that we all applaud the zealousness of the converts on the Opposition Benches in supporting the vigorous stand that he has made to protect our fishing industry? I urge him, however, to beware of the zealousness of the converts because sometimes in their keenness they can make fatal errors.
On the question of third parties' relationships and the improved situation for the United Kingdom in Norwegian waters, can my right hon. Friend explain to the House in more detail how he sees it rolling on after July and taking in other countries?

Mr. Silkin: Mindful of what you said about crisp questions, Mr. Speaker, I reply that the basis is that in September last year we agreed with the Commission, the French and the Germans to a division of cod in Norwegian waters, which gave us 70 per cent. of that cod. By the end of the year there had been over-fishing by our two partners and as a result we did not even get our quota. This year there has been no quota. Large and very powerful French and German vessels have been fishing ahead of ours. Therefore we were afraid of over-fishing in those waters and in consequence that was the basis of the agreement. Until the end of July we shall get the proportion, based on the 1977 agreement, which is the highest amount, and the French and German quotas will drop down in that period. That should enable our fishermen to fish the full amounts and at the same time it will contain the fishing of the French and Germans.

Mr. Powell: Is the right hon. Gentleman aware that support for his dogged defence of British interests and rights, despite the weak bargaining hand that he inherited, is felt far beyond the fishing industry itself? Now that he has been obliged to take over the responsibility for herring conservation in the waters around these islands, will he administer and organise it in such a way that he can preserve, by the very small allocations which are necessary, the skiff fisheries in areas such as Mourne, and the important and special industries which depend upon them?

Mr. Silkin: I thank the right hon. Gentleman for what he has said. I will do my best, and I know that my right hon. Friend the Secretary of State for Scotland stands ready in his field to bring in Scottish conservation measures. The right hon. Gentleman knows that he has always had my sympathy about Mourne. I have always said that there might come a time when we would need to do this.

Mr. James Johnson: I urge my right hon. Friend to ignore the petty and bad-tempered comments from the Opposition Front Bench. Is he aware of the deep satisfaction of all hon. Members representing fishing ports in all parts of the House for the firm stand that he has taken against the callous and cynical demands of our continental partners for

so-called equal shares of stocks in our waters?
I thank my right hon. Friend for the work that he has done for the deep-sea fleet in Norwegian waters. This may have resulted in only 6,000 or 7,000 tonnes, but in Hull we are thankful for small mercies.
Is it correct, as Mr. Gundelach has said —although I do not accept it—that the United Kingdom demands this week would give our fishing people 100 per cent. of the stocks in the 200-mile belt by 1982?

Mr. Silkin: I saw that comment in a written statement which differed from the oral statement that Mr. Gundelach had made to the Council. Of course I am bound to say that it is true in one or two species, although the statement that he made gave the impression that it is true in all species. It is true of cod, plaice and herring.
Germany, Denmark, France, Holland and Belgium together contribute precisely 20 per cent. of the fish resources of the Community, and according to the Commission's proposals they take out 70 per cent. I thought that in suggesting a mere 100 per cent. I was being rather modest.

Mr. Grimond: While wholly supporting the Minister in his admirable fight in Brussels, may I ask him whether the conservation measures that he is considering must be of a general nature for all boats and types of fish, or whether they are variable? Is he aware that it is not only the fish that must be considered—important though it is to conserve them—but the industry, and in particular the fishing communities that depend entirely upon fishing? Will he ensure that any such measures do enable these communities to continue their livelihood?

Mr. Silkin: As the right hon. Gentleman knows, that lies very much within the field of responsibility of the Secretary of State for Scotland. Of course very painful decisions will have to be taken. The industry, including the Scottish industry, has assured me that although it may suffer very much—and I think it will suffer much more from the West of Scotland herring closure than the industry of any other country—it is not only prepared to do it, but it wants to see conservation measures. That is why


I say again, the sooner we can do it the sooner we will do it.

Mr. Jay: Does my right hon. Friend regard the common fisheries policy as one of the benefits of EEC membership for which the Conservatives voted?

Mr. Silkin: I do not want to try to make out an examination list of the benefits of our membership of the EEC, but I suppose that if I were to do so I would not necessarily regard the common fisheries policy as coming at the head of the list.

Mr. Donald Stewart: Is the Minister aware that he has the full appreciation of SNP Members on his strenuous fight on behalf of our fishermen? Is he also aware that the fishermen in the West back the judgment about the risk to the herring stock, although they themselves will suffer most in terms of employment and earnings? If a ban is imposed. will he consult his right hon. Friend the Secretary of State for Scotland about exemption for those boats that practise conservation by the use of drift nets?

Mr. Silkin: This is a matter for my right hon. Friend the Secretary of State for Scotland, but I wish to emphasise that there will be difficulties. So far as it is possible to mitigate them we want to do so, but I am afraid that we may be in for something of a difficulty in this and in other matters, some even in England.

Several Hon. Members: rose—

Mr. Speaker: Order. I hope to call those hon. Members who have been rising to their feet, if they are brief.

Mr. Spearing: Although conservation is clearly an important matter, may I ask my right hon. Friend to confirm that a matter of importance to the United Kingdom is the proportion of catch which is ultimately made available to us? Does he agree that, although he is justifiably supported on conservation matters by those who approved the common fisheries policy, no such arguments can be said to apply in respect of catch because that was not part of the policy? Therefore, those people cannot talk about protecting the industry as such.

Mr. Silkin: The common fisheries policy is always being quoted to me by

other members of the Community. They say that they are in favour of it, and dispute the question of catch with me. I regret to say that they appear to dispute the question of conservation, otherwise the conservation measures that now exist would all be Community measures. However, not one is a Community measure: they are all national measures.

Sir J. Langford-Holt: If unilateral action on conservation becomes necessary, the right hon. Gentleman clearly will have the support of the House. But are we not in some respects in danger in this argument? Was it not the unilateral conservation policy that led us into near conflict with Iceland about three years ago? The right hon. Gentleman spoke of the necessity of reaching agreement with Iceland.

Mr. Silkin: I wish slightly to correct the first part of the hon. Gentleman's remarks. Unilateral conservation measures will not become necessary: they are necessary. I think that the whole House understands that. On the subject of Iceland, that dispute took place some time ago before the Commission was empowered to act on behalf of the Community in negotiations with Iceland. The Icelanders at that time based their case on two fundamental points. The first was conservation, and the other involved the existence of 200-mile limits, which they pointed out were their waters and nobody else's.

Mr. Spriggs: Will my right hon. Friend confirm that there are no grounds for making reciprocal agreements on fishing rights with Community countries?

Mr. Silkin: Under the Treaty of Accession, the basis, I understand, is that there shall be equal fishing opportunities in all member States for Community's vessels, whether they come from Germany, Denmark, Holland, Luxembourg, Italy or even the United Kingdom. I sometimes think that that point of view in respect of some of our northern neighbours is sometimes more honoured in the breach than in the observance.

Mr. Buchanan-Smith: I appreciate the urgency and necessity of conservation measures. However, does the right hon. Gentleman acknowledge that the bringing in of specific measures, such as the ban on herring fishing on the West coast of Scotland, will lead to diversion of


effort elsewhere? Does he not agree that what is needed is a comprehensive scheme of conservation which takes account of the repercussions of individual measures dealing with the conservation of fishing both in terms of species and of certain areas around our coasts?

Mr. Silkin: I agree with the hon. Gentleman, but the point I made in the debate that took place a week ago was that I have certain guidelines, and both my right hon. Friend the Secretary of State for Scotland and I must keep to them. We must first—that is the law—seek the approval of the Commission. Even if the Commission does not give us its approval we can still go ahead, but we must seek its approval. That takes a certain amount of time.
The second consideration is that the conservation measures must be in accordance with the scientific evidence. That is not always available.
The third point is that the measures must be necessary. That I would agree in every case, and so would the hon. Gentleman. The final point is that they must be non-discriminatory. One sometimes hears arguments that measures are discriminatory against another member of the Community. It is curious that in most of the measures which the United Kingdom has taken unilaterally I would have thought that the United Kingdom had suffered more than other countries. That point has never yet been taken.

Mr. Raphael Tuck: Is my right hon. Friend aware that he deserves the congratulations and thanks of the whole House and country for the superb stand he has taken in Europe? Indeed, he is one of the best Ministers of Agriculture we have ever had. Does he agree that in view of the fact that our waters contain between 50 and 60 per cent. of the EEC's total fish catch, the EEC's offer to us of only 30 per cent. of the total fish catch is contemptuous and derisory?

Mr. Silkin: I do not know about "contemptuous and derisory". It may be just a fault in mathematics. At any rate, we have a few months to see whether that is the case.

Mr. Clegg: Did the Minister point out to the other Ministers the impact of the

possible accession of Spain and Portugal on the common fisheries policy? I do not see how one can bring those countries into the EEC and continue with the CFP as it is.

Mr. Silkin: I pointed that out in the Council and more specifically, and in another city altogether, to one particular Minister of that Council.

Mr. Watt: Does the Minister recognise that SNP Members wish him a pleasant and fruitful journey to Norway later in the month? We hope that he will manage to negotiate some decent reciprocal fishing rights. Will he take with him as compulsory bed-time reading the report of the Expenditure Committee on the fishing industry? Does he agree that if he were to implement the recommendations in that report, the next generation might have some fish to catch, whereas if we listen to what the EEC says, we shall have only paper fish to talk about?

Mr. Silkin: I invariably take the report of that Committee with me to bed. It is now the sole topic of conversation in my household. That is not to say that I do not think there is a great deal in the report with which I find myself in agreement.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 10th JULY

Members successful in the Ballot were:

Mr. Terry Walker.
Mr. Geoffrey Robinson.
Mr. Anthony Nelson.

BILL PRESENTED

LOCAL GOVERNMENT ACT 1974 (AMENDMENT) (No. 3)

Mr Geoffrey Finsberg presented a Bill to amend the Local Government Act 1974 so as to enable Members of Parliament to refer complaints relating to local administration to Local Commissioners: And the same was read the First time; and ordered to be read a Second time upon Friday 14th July and to be printed [Bill [52.]

Orders of the Day — SUPPLY

[24TH ALLOTTED DAY]—considered

SCOTTISH ECONOMY (OIL RESOURCES)

4.8 p.m.

Mr. Gordon Wilson: I beg to move,
That this House condemns Her Majesty's Government for its mismanagement of Scotland's oil resources and its refusal to establish an Oil Development Fund for Scotland to be used for restructuring the Scottish economy, encouraging industrial growth and reducing unemployment.
There can be no more important subject for debate for the people of Scotland than that which we have chosen today. The future of our country and its economy can rest on this major source of national wealth. I refer to the resources of oil and gas which lie off our coasts.
Today's news about the cut-back at Singer on Clydebank from 4,500 jobs to 2,000 indicates the real worry about the fabric of the Scottish economy. It is sad that there is no sign that Scotland can have those additional resources steered towards her and that the Government, although making claims about the value of having a Secretary of State for Scotland in the Cabinet, are apparently unable to do anything to save jobs in Scotland. It must ring in many ears today in that part of the country that a vote for Labour means a vote for unemployment.
I should like to review the three areas that will be affected by oil—unemployment, the curtailment of emigration and the social distress which many indicators have shown to exist in Scotland. These are the main subjects of political and social concern in Scotland. Every political party has been offering solutions for those problems. In this debate we are discussing, in particular, the mismanagement of our oil resources and the lack of an oil fund to help our industrial structure.
Labour Members will have grave difficulty in making excuses. They can

blame some of the faults on the Conservative Party which failed in its duty by leaving behind a policy vacuum when it left office in February 1974. It can be compared with the early English king Ethelred the Unready.
In almost every sector of the oil industry which the Government have tackled, they have bungled the approach or climbed down on their main intentions. The consequences for Scotland have been damaging, are damaging and will continue to be damaging for years to come. For example, the platform industry was one of the main areas of interest when the Government came to power in 1974. They set out to exploit the oil well quickly. One of the earliest Bills that we had in this Parliament was the Offshore Petroleum Development (Scotland) Bill 1974. The then Minister of State, now Secretary of State for Scotland, said during the Second Reading of that Bill:
to ensure that these vast resources can be used to the best effect they must be exploited quickly.
Later he said:
It is very much bound up with the question of getting oil out as quickly as possible because the work involved will be an important source of jobs and prosperity for the people of Scotland."—[Official Report, 19th November 1974; Vol. 881, c. 1108–9.]
Right from the outset, the Minister indicated that it was the Government's intention to get the oil out quickly—that was their main criterion—and to produce employment. The oil is now coming out and the balance of payments has been strengthened, although a recent Barclays Bank report pointed out that the advantages of that strengthening will be eroded through import suction, so the alleged long-term benefits may not exist for too long.
It is in connection with jobs that the Government's strategy was entirely wrong. The intention was that oil companies should be given a choice of platform yards producing steel and concrete platforms, and there was a wholesale rush to provide those yards. Warnings were given during debates on the 1974 Bill that there would be too many yards and too much dislocation. Today we find that of the yards that were provided, Nigg and Ardersier have been continuously open, Methil closed and reopened, though only with an order which had to be partly shared with another EEC country, Ardyne is


empty, Kishorn has recently been empty and Portavedie and Hunterston were never used. As a result, we have wasted more than £25 million of public money which could have been used for alternative industrial development.
We had hoped—I think that I speak for everyone—that the oil industry would provide one of the greatest injections of life into our engineering industry, but since the Government came to power, we have lost 10,000 engineering jobs in Scotland while there has been an increase of 3,000 such jobs in the United Kingdom as a whole. The engineering sector in Scotland is critical. It is the greatest repository of our skills and has been the backbone of our industry for many years. As other countries have shown, it should have been expanded, even in these difficult days of recession.
We had hoped that the arrival of the oil industry, giving, as it did, a large and protected home market, would have provided a stimulus for production and development which would have given the engineering industry the opportunity not only to secure a strong base in the oil industry but to become much more sophisticated in other industrial applications.
The Labour Party's statement "Oil for Everyone" which was issued before the General Election in October 1974, said:
The Labour Government's plans for North Sea Oil will benefit everyone by creating many more jobs in Scotland. By creating new industry. By creating, through Labour's new economic strategy, a booming Scottish economy.
I am waiting for the "Hear, hear" from the Government Front Bench. Do they think that there is a booming Scottish economy when we have 170,000 people unemployed, compared with the figure of 91,000 when they came to office? If that is their example of a booming Scottish economy, heaven forbid that we should have any more of it.
It is time that we had a major change. We had a promise from the Labour Party in the election campaign about what it would do, but on the two main sectors, which would have helped many of the people in West Central Scotland who voted Labour, we find that the engineering industry has not got access to the contracts that have come from oil and that it has not been able to maintain its position.

The pre-election message of the Labour Party must sound sick to many folk in Scotland and today's news from Singer will reinforce that.
A number of jobs have been created. Some could hardly avoid being created, but it is a peak of 60,000 jobs, and once the underwater or land pipelines from the offshore platform have been laid to the market, no more will be laid unless more fields are found. There is a limit, and many of the jobs are only short term. They will disappear. Many have already disappeared and some have been caught up in other developments. The creation of 60,000 jobs is a disappointing achievement in view of the hopes that were held out.
We must lay emphasis on the fact that we had a strong home market which existed because oil resources were being developed off the coast of Scotland. Bearing this point in mind, I suggested during our debates on the oil taxation Bill that fiscal incentives should be built in to encourage oil companies to buy Scottish. I believe that if the Government had, from the outset, introduced into the licences a "Buy Scottish" provision and it had been known in advance to the licensees that a certain proportion—we suggest 50 per cent.—of the products should be purchased on our home market, many more jobs would have been created in Scotland.
Throughout the world where oil has been developed, these protections are provided. For example, there is a prohibition in the United States, under the Jones Act, on the use of supply boats which do not fly the American flag. If the mighty American Government which controls the mighty American economy found it necessary to take those steps, surely the British Government could have done at least that for the people of Scotland.
We have not had the employment and economic multiplier taking effect. We were told that the benefits of the oil industry would penetrate other industries remote from oil and provide more work throughout the country, but if we look at the distribution of employment, although we are happy that many areas, such as the Grampians and the Highlands, have done very well, we find that many areas in Scotland with industrial resources


and strengths have benefited hardly at all from the oil industry. In July 1977, the numbers of inshore jobs fully related to oil were nearly 13,000 in the Grampian area, nearly 7,000 in the Highlands, 1,750 on Tayside, 1,600 in Fife, Central and the Lothians together, 845 in the islands and a mere 1,460 in mighty Strathclyde. For most of Scotland, the impact of the oil industry has been a damp squib.
It may be that Scotland's industrialists are to be blamed for slowness. It may be that there is an element of fairness in that criticism. The speed of the Government's intention to exploit the oil did not give our industry much time to catch up. It is interesting that the report of the International Management and Engineering Group on industrial opportunities for the United Kingdom stated:
British industry has to break into an area of activity in which foreign investment, mainly American, has established an entrenched position in offshore work, and is daily strengthening that position by the accumulation of experience in solving the still more difficulty problems of the North Sea.
There should have been some form of Government back-up to ensure that more work went to Scottish firms. No doubt the Government will say that they established the Offshore Supplies Office. However, the Office had to accept, first the political mandate that it was there to help the early production of oil, to get the oil out as quickly as possible, and, secondly, to provide contracts and jobs. One of the problems is that the OSO is just as likely to provide jobs and contracts for those south of the border as for those in Scotland. It was located in Glasgow, but from the outset many of the important officials—the audit engineers, for example—were located in London. It is only lately that they have been transferred to Glasgow.
The OSO will not publish the percentage of the work that goes to Scottish firms although it publishes that information for United Kingdom firms. There are regular outputs of information for United Kingdom firms, but it cannot or will not produce similar information for Scotland. It will not produce figures to tell us what business and employment was generated from oil in Scotland and how it assisted in that activity. I accept that the OSO tries to do its best, but I suspect that Scotland has had only a

small proportion of the work, bearing in mind that the oil is located off our coast.

The Minister of State, Department of Energy (Dr. J. Dickson Motion): Rubbish.

Mr. Wilson: If there is any doubt, let the Government produce the figures. If they can produce the figures, we shall listen to them. The right hon. Gentleman, who is so sensitive on the subject and who shouts from the Government Front Bench, knows full well that he cannot produce the figures. If he did, they would be so shameful and shocking that the Department would be embarrassed.

Mr. Douglas Henderson: Get up and give us some figures.

Mr. Wilson: If the Government cannot produce the figures, I draw an answer from that. There has been little work going to Scotland during one of the blackest depressions that we have had for years. However, we live in a world in which offshore development is regarded as an extension of national shipping and shipbuilding.
There are various forms of protection. I suggest that the Jones Act is one example. Many of our merchant seamen would have found it desirable to benefit from a similar measure. It would have meant more jobs for them at home.
In future licensing rounds it should be made clear to the oil companies in advance that they will be asked to indicate, in the event of their being successful in the allocations of licences and the finding of oil what industrial application or investment they propose to steer towards Scotland. The licences are discretionary and should be used to bring in as much work as possible. I cannot understand why the Government have been so relaxed and liberal in their attitude. They have allowed employment and economic development to disappear.
I shall make a few comments about taxation and participation. It is difficult to cover the whole range of the development of the oil industry and the use of the oil funds even in an opening speech. Comment should be made about taxation. It is unsatisfactory—this can be seen from the falling estimates of income that


the Government will be receiving from the revenues—that the oil companies are seen to be using the loopholes that exist in present legislation. The Government should do something about that. Time is short.
Labour Members who did not study these matters when we were considering oil taxation will be surprised to learn that the Government halted in their tracks in the middle of the Bill. They set out with great statements about what they intended to do. They said that they would take on the mighty oil companies, but midway through the proceedings in Committee they changed the taxation structure. They took the Bill backside foremost. They had not developed a tax system that would work.
There is a significant article in the Petroleum Times of 7th March 1975. The article appeared some time ago but it remains relevant as we are still labouring under an unsatisfactory taxation regime. The heading is:
The UK Government's give-away tax.
It reads:
The battle of the UK rate of petroleum revenue tax is now over, and the oil companies operating in the North Sea can chalk up another victory over a European Government.
Later in the article there is reference to dilution. It said:
Although the computers have yet to digest the new programmes, it is already clear that the manifesto policies have been diluted almost to the point where no flavour is left.
That was the analysis in one of the petroleum journals. It is an objective analysis of the weaknesses of the Government's tax structure.
Participation has been summed up by the Government's words "No gain, no loss". There has been no gain to the country and no loss to the oil companies. That does not rank very well with the claims made in the October 1974 General Election that a Labour Government would negotiate for participation and take participation. The whole process was a waste of time, and the Government well know it. They had to fulfil the letter of their manifesto promise even if they have been unable to implement it in reality.
Participation and taxation were two of the main areas of concern to the Government when they took office. They

have bungled them. They have bungled the taxation set-up. They could have gone for a higher petroleum revenue tax. They had the opportunity and they decided not to take it. They procrastinated on participation. We have not had anything on that score.
Depletion policy is extremely important. I can give some credit to the Secretary of State for Energy, who in a speech to the Southwark College of Further Education—he is a hard-working man to cover it—on 1st February 1977 said—

Mr. Henderson: Where is he?

Mr. Wilson: —
The other important question is how fast the Government should authorise the lifting of the oil. If we take it up too rapidly, we may be in danger of having a national surplus of oil in the 1980s only to move into shortage during a period of world scarcity, with all the financial implications of that misjudgment. Very prudent and careful assessment will be needed to weigh our immediate interests against our long-term needs.
It is indicative that the Secretary of State for Energy realises, along with other specialists, that oil prices are likely to rise dramatically in the early 1990s, if not before. At that stage oil imports will cost a tremendous amount. However, instead of eking out the oil over a longer period the British Government are making the strategic blunder of trying now to produce as much oil as they can, when there is a glut and the price has stabilised. Yet in the 1990s, as the Government well know, the United Kingdom will be importing up to 50 per cent. of its oil requirement at extremely expensive prices.
It is only a pity that the Secretary of State for Energy does not have the same fighting ability that the Minister of Agriculture, Fisheries and Food has displayed in the Common Market when dealing with fisheries. If the Secretary of State were prepared to do more about oil and to fight inside the Mafia of the Cabinet, something more might be done.

Mr. Harry Gourlay: Will the hon. Gentleman make up his mind, or make up the SNP's mind, what is to be his or its policy on depletion? Earlier he was arguing that very few jobs have come to Scotland from the oil industry, but he is now arguing that we should slow down the rate of depletion, which would add to unemployment in Scotland.

Mr. Wilson: My party's policy has always been clear. I have had some say in its evolution. Its policy, basically, is that we take out of the sea as much oil as we require for home and export consumption. That is the principal strategy.
Perhaps I may put it another way for those who are unaware of the Scottish situation in terms of oil production. We consume about 10 million tonnes of oil per year. If we produce 90 million tonnes of oil, as the Government intend, to quote one of their lower targets, that will be the equivalent for the United Kingdom of about 900 million tonnes of oil per year pro rata. If Britain consumes 100 million tonnes and a population multiplier of nine is applied, obviously that is the scale of the uplifting that the Government are taking per head of population.
The second point that I want to make in response to the hon. Member for Kirkcaldy (Mr. Gourlay) is that, if we increase the Scottish content of the orders which come in, we shall get many more jobs. On the one hand, we save the oil for future generations. We have agreed to accept higher production figures than we would have wished. We have developed our approach in considerable detail on the subject. If anyone is interested, I can provide some detailed comments that I have made. The important thing is that, by increasing the Scottish content by the methods which I have suggested, we should have much more employment and activity to help Dundee, for instance, West Central Scotland and other parts of the country. That would be more sensible than to stampede into unnecessary oil production and lost job opportunities.

Dr. Mabon: if 10 million tonnes is the Scottish net self-sufficiency figure and we have produced 38 million tonnes in one year, is the SNP's depletion policy that we should not open up any more new fields?

Mr. Wilson: No, it is not. It should be taken gradually over a period. We should allow the anticipated rate of production to fall slowly within the parameters which exist for that. There are technical matters concerned with that aspect. I am very glad that the right hon. Gentleman came in on that matter. If he had been able to help me with the figures

from the Offshore Supplies Office with regard to the Scottish content, it would have helped considerably. If he has that information, we should be pleased to hear it.

Dr. Jeremy Bray: Will the hon. Gentleman give way?

Mr. Wilson: I will allow one more intervention. Time is short.

Dr. Bray: If the hon. Gentleman is suggesting that it is a matter of continuing with existing contracts, presumably employment in opening up new fields would dry up overnight.

Mr. Wilson: No, it does not mean that.

Mr. Henderson: That is the British Steel Corporation's policy.

Mr. Wilson: My hon. Friend makes the point about British Steel. If we adopt a gradual process of running down production so that we have a lower depletion take-up rate, we shall have more oil available for future generations. That is very important. There are those of us in this House who have some thought for our children and grandchildren. We are not prepared to blue it all in one great extravagant blow-up of the kind that the British Government have in mind.
I turn now to petrochemicals. There must be a lot of worry that too little has been done in this connection. We have not had much of the great petrochemical boom which was supposed to build up employment in Scotland. Apart from Grangemouth, most of Scotland's oil is due to be exported. There has been silence about Cromarty Petroleum. We are waiting to hear a little more about that. Scanitro has gone by the wayside. Many of the petroleum gases are due to be exported without being developed, refined and processed here. We are still awaiting final news from the Government about Mossmorran and the associated cracker.
We need the jobs in chemicals. Only 1·6 per cent. of jobs in Scotland come from chemicals compared with 2·2 per cent. in England and 2·3 per cent. in Wales. Therefore, there is room for improvement there.
I find that each company seems to find excuses for exporting to England or further afield and not building up its opportunities and investment in Scotland. The Government have gone out of their way to help, because their refining policy has been relaxed to help the companies to export crude oil instead of refining more, even inside the United Kingdom.
The plastics industry will grow, according to surveys which I have seen. It is significant—again, we come back to the Common Market—that some of the major European chemical companies have not established branches in Scotland or even in the United Kingdom. We have not had much benefit from that industry. Yet, it is reckoned that about 10 million tonnes of additional plastics capacity will be produced in Western Europe in the next decade. There are opportunities there.
We are still waiting to hear what is to happen to the gas gathering pipeline. That caused a lot of publicity two or three years ago, but it has disappeared.
I ask the Government to consider encouraging oil companies to become involved in joint projects to ensure that singly they do not find excuses for failing to build up their investment in Scotland.
I come now to the last aspect of my speech. I refer to the oil revenues and the oil development fund. The way in which the oil revenues are being dealt with must count as one of the greatest swindles and frauds on the Scottish people for a long time.
At the last election, all the parties had their own delicate ways of expressing that the Scottish people would get the maximum benefit. That was the inference that they put before the people of Scotland.
The Conservative Party proposed that there should be a development fund, interestingly enough, to be controlled by the Secretary of State for Scotland—that was reported in an article in the Scotsman in 1975—but guided by the Scottish Assembly. I am not sure whether, as the Tories reneged on their promise of an Assembly, they have now reneged on the development fund about which they made great play in the election.
The Liberal Party said that Scotland would get half the revenues. That was very generous. I am sure that most

English Liberal Members did not appreciate what their Scottish colleagues were doing on their behalf. However, it did not figure in the Lib-Lab pact. The right hon. Member for Orkney and Shetland (Mr. Grimond) did not use his influence with his right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) to persuade him that one of the crunch issues of the Lib-Lab pact should be that the Scottish Assembly had access to the oil revenue—not even the half that the Liberals generously had in mind.
The Labour Party has procrastinated on the issue and implied that Scotland would get its share. There is a lot of hypocrisy coming from the Labour Party. It used to say that the SNP's attitude to oil was immoral—that the Scots were greedy. But on 2nd June 1978, that worthy publication Labour Weekly carried the headline:
EEC has eyes on our oil.
Obviously, "our oil" is very much a form of British nationalism.
On 16th June 1978, Tribune, that champion of international workers' solidarity and the flail of "narrow nation-ism", carried the headline:
How the EEC seeks 'legal' ways to grab our oil.
For those who are interested in following it through, no doubt free copies will be made available by the Government as they must have difficulty in selling them.
The oil revenues must be the source of the deepest disappointment. We have had "The Challenge of North Sea Oil". I do not know how the Government managed to come up with that title. I should think that the new PR expert to advise the Prime Minister would have difficulty in fighting any challenge at all in that document which stated that the oil revenues would go into the Chancellor of the Exchequer's—

Mr. Henderson: Piggy bank.

Mr. Wilson: Piggy bank. That document states that the oil revenues would be steered towards industrial development in Scotland and in other under-developed regions.
On 30th January 1975, again during the course of proceedings on the Oil Taxalion Bill, I had a letter from the then


Minister of State, Treasury. After turning down proposals which I had made to increase the amount of work coming to Scotland from oil development, it stated:
As an Assisted Area Scotland benefits from measures financed by the Exchequer from general taxation. As you will appreciate our capacity to continue with these and other measures such as the Regional Employment Premium (which we retained) will be enhanced by the revenue which will in due course accrue to the Exchequer from North Sea oil. Scotland should thus benefit from our general regional development policy: we hope it will also draw advantage from the more specific measures we have introduced or promoted.
Three years have passed, and with them the regional policy and the regional employment premium, the abolition of which, it was indicated by the Scottish Council, would cause the loss of some 20,000 jobs in Scotland. The Government are responsible for taking away REP after saying through the Treasury that this would be one of the benefits that Scotland would get from the oil resources. If anyone believes that, he will believe anything. It shows that the Government say one thing and change their minds after a year or two as soon as they think they can get away with it. I remember the exchange that my hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) had in connection with the Chrysler car project which had been proposed for 1979. I notice that the Secretary of State for Industry is just about to scurry to Chrysler to explain the position.
We were accused by hon. Members of being greedy. I remember the abuse that I took. They have to realise, however, that the oil revenues constitute one of the main possibilities for Scotland to develop its economic structure. There is an interesting aspect to the argument about need and morality. The Church of Scotland in its Church and Nation Committee Report in May this year said that Scotland has a "moral claim" to special treatment. When a Church says that Scotland has a moral claim to the oil revenues, that explodes once and for all the insinuations and nasty allegations that have been made over the years.
We are asserting tonight Scotland's moral and legal claim to the oil revenues, or a fair share of them. We have to repair our social and economic base. In October 1974 an STUC leaflet declared that Scotland would get the major part of the

revenues devoted to industry. It said that these could be used to help restructure the economy of Scotland and the development areas.
We need development resources to put into our engineering chemicals, plastics, service, food processing and timber production and processing industries, and for investment in energy, in better transport infrastructure, in housing, and, above all, in the development of our human resources. These are the things that we can do with the assistance and help of the oil resources. We have to have them and we have to get our economy moving. We must bring down unemployment. No answer from the Government can provide any solution.
This House can take positive action tonight to make amends for its ruthless and unscrupulous rape of Scottish resources. It can rightly condemn the mismanagement of Scottish oil, and it can agree the need for a Scottish oil development fund to give the resources necessary to rebuild our nation.

4.43 p.m.

The Minister of State, Scottish Office (Mr. Gregor MacKenzie): The nicest thing I can say about the speech of the hon. Member for Dundee, East (Mr. Wilson) is that it was not the most constructive I have ever heard. We all waited for the Book of Revelations. Instead we got something like the performance of an Old Testament prophet, and the speech was almost as long as that we would expect from an Old Testament prophet. It did not help me necessarily to understand the various arguments.
The hon. Member has demonstrated once again just how narrow and unrealistic is the view of the SNP of oil development and of the opportunities that oil affords to the people of Scotland and of the United Kingdom. In the light of the election results of the last few weeks it is perfectly clear that the people of Scotland do not share the greedy and selfish approach exhibited by the SNP.
The development of North Sea oil and gas has been one of the most successful operations undertaken in the United Kingdom since the war. Bearing in mind that the oil is being recovered from one of the most difficult areas in the world, the SNP's niggardly attitude seems to me to be designed to make a success


look like a failure. All the people concerned can take credit enough for the remarkable success which has been achieved in moving to a position in which about half the United Kingdom's oil requirements are being met from the North Sea. The figure last year was 38 million tonnes. That fact will be seen increasingly as one of the most important milestones in Britain's economic history.
Achieving this state of affairs has not been without difficulty for the Government. Perhaps I might remind the House of the situation we inherited. It was most unsatisfactory in a number of important respects. When we came to office the previous Government, in four years of power, had operated one gigantic licensing round of nearly 300 blocks. The consequences of their action has illustrated how defective their policies were in almost every respect.
No effective provision had been made to secure an adequate share of the revenues for the people. There was no petroleum revenue tax, and not even any means of making corporation tax effective. There had been inadequate controls over development and no effective controls over the rate of depletion or the flaring of gas. There had been no effective control over exploration after the initial years of the licence. We have taken action to put those matters right.
The hon. Member for Dundee, East revealed in his speech to day that, we gather, he is now in favour of a depletion rate of 10 million tonnes a year, as against 38 million or 50 million tonnes a year. There would not be the jobs there have been in the offshore and onshore industries or the developments both in the North Sea and throughout Scotland if that policy had applied.

Mr. Gordon Wilson: Where in my speech did I say that production from the North Sea should be 10 million tonnes? Nowhere did I say that.

Mr. MacKenzie: The hon. Member could not have been reading his speech very carefully. He was questioned on this matter by my hon. Friend the Member for Kirkcaldy (Mr. Gourlay). What I have said was the distinct impression that the hon. Member left with my right and hon. Friends and, I am sure, with the Opposition.
The taxation measures that we have introduced have made sure that the people of Scotland are getting a fair share of the revenues while allowing the oil companies sufficient profit on their investment, encouraging them to develop the resources. The Petroleum and Submarine Pipe-lines Act 1975 puts control where it should properly be, which is in the hands of the Government. Under the Act the companies are subject to tighter control over submarine pipeline routes, levels of exploration activity, and rates of depletion from individual fields.
In addition, the creation of the British National Oil Corporation ensures that the State participates in all the major discoveries, and guarantees that these important offshore resources will be exploited and developed in the way which best accords with the interests of the people of Scotland and of those throughout the United Kingdom. I believe that all of these measures are now widely accepted both by the public and by the oil industry as just and necessary.
In Scotland one of the most serious failings was the quite inadequate forethought given initially to the needs of the infrastructure in supporting North Sea oil. That is a condemnation of the previous Conservative Administration and of the SNP Members. Apart from a few slogans which we occasionally heard from the SNP, they made no constructive contribution. Only since we have come to office has a major effort been made to catch up in this area. The local authorities and the other public agencies are, I believe, to be congratulated on their achievements.

Mrs. Margaret Bain: Is not the Minister, in fact, outlining with great hindsight the policies that should have been adopted in the late 1960s, when it was a question not of a Conservative Government but of a Labour Government? In the late 1960s the Labour Government practised the kind of policies that were followed by the Conservative Government.

Mr. MacKenzie: I am sure that the hon. Lady has one thing in common with me at present—and that is that neither of us knows what she is talking about. One thing that I recall is that the discoveries were made at a very much later stage than that which she has just mentioned.
It is worth while mentioning that we have done a great deal on the whole question of infrastructure, and much to the benefit of some SNP Members.

Mrs. Winifred Ewing: Where?

Mr. MacKenzie: Perhaps I may continue for a little while without interruption.
There have been major developments of harbours at Aberdeen, Peterhead, Montrose and in Shetland. We have the reconstruction of airports at Aberdeen, Inverness and Sumburgh. There is an immense house-building programme in the Grampion Region, the Moray Firth and Shetland. The improvement in main line railways and communications has been very marked. We have also ensured that ratepayers in the areas affected by these developments were protected from the full impact of the additional financial burden in providing these facilities.
From the start, we have given the highest priority to ensuring that Scotland's economy gets the maximum possible benefit from activity related to oil. One of the first decisions was to move the Offshore Supplies Office from London to Glasgow. The OSO has had a major role in helping industry in Scotland—and, indeed, in the United Kingdom as a whole —to meet the new requirements of the offshore business.
We also decided to put the headquarters of the British National Oil Corporation in Glasgow. This has not only provided—many of us are interested in this matter—jobs of high quality, and much needed jobs, but helped to bring an important part of the decision-making on oil matters to Scottish people.
At this point, I should like to pay a tribute to the very important part that the BNOC played last summer in helping to secure two very valuable contracts for the Marathon oil rig building yard on the Clyde. Further contracts, as some of my colleagues may know, are under negotiation, and, based on the yard's performance, we are certainly confident of its long-term future.
We all appreciate that it takes time for industry to adjust to the requirements and specification of a new industry such as North Sea oil. As has been mentioned

often, the latest available full figures that we have show that at present some 55,000 to 65,000 people in Scotland enjoy jobs which are either directly or indirectly related to exploration for and exploitation of oil under the North Sea.
The hon. Member for Dundee, East chided us, in the course of his rather long speech, about the estimates of the OSO. It is worth noting that certainly 60 per cent. of the orders from the United Kingdom sector of the North Sea are now placed in Britain. That is a very good record indeed. We have to improve it further—not by protection or by compulsion, hut by trying to better our own industrial performance and the competitive position of our industries.

Mr. Gordon Wilson: rose—

Mr. MacKenzie: The hon. Gentleman took a fair amount of Back Benchers' time in the debate—a very long time.
Not many weeks ago I opened a factory in East Kilbride, a factory producing oil well-head equipment. I have visited many other factories. People who go about Scotland with their eyes open—I hope that the hon. Gentleman will occasionally do this—will see that a very considerable proportion of that 60 per cent. of orders is providing jobs for people throughout Scotland.

Mr. Gordon Wilson: rose—

Mr. MacKenzie: Once again, I am obliged to give way.

Mr. Gordon Wilson: If the right hon. Gentleman has made all these trips and has been in touch with the OSO, will he say what the Scottish figure is in relation to jobs, as he was able to give it for the United Kingdom?

Mr. MacKenzie: What we are concerned about is to look at the percentage here. If the hon. Member had been listening as carefully as he has been talking, he would have heard me say about two sentences ago that some 65,000 jobs were provided for the people of Scotland as a result of this industry.
It is already clear that the United Kingdom industry has built up the skills and the knowledge to compete at home, where there are growing markets for inspection, management and repair of installations, and certainly has a very


considerable expertise in the export markets.
Scotland has, therefore, benefited already to a very substantial degree from the economic activity related to North Sea oil. This has happened at a time when not only Scottish but British, European and international rates of unemployment have been higher than at any other time since the war. It would certainly be a great mistake to imagine that the development of North Sea oil could alone counteract the unemployment caused by the international recession. This has been a boost to our economy. It has come at a time when it was very badly needed, and without it unemployment would certainly be very much higher than it is at present.
Let me turn to the wider economic benefits which affect the country as a whole. We have heard a great deal from SNP Members about what they would do with taxation revenues from North Sea oil. I can well remember, as can, no doubt, many of my colleagues, on both sides of the House, what was said by various SNP Members during the course of the last General Election. Whenever they were challenged about how they would increase pensions—I cannot remember the figure now; it varied from area to area and from candidate to candidate—all that we could discover was that the money would be coming out of the North Sea. One would have thought that instead of oil coming ashore, someone—an Almightly providence, perhaps—would be delivering pound notes. But I know that the people in the area that I represent were certainly not conned by the SNP candidate. They did not believe that the people of Scotland had collectively won the football pools or anything of the kind.
I do not think that people find the SNP's approach to the difficult economic problems facing us to be constructive. Certainly the SNP has failed to make out a convincing case, even on its own terms. SNP Members never explain to us how they would tackle the deep-seated problems of the Scottish economy—problems of steel, of shipbuilding and of motor vehicles. As most of us know these problems stem from a lack of demand in overseas markets and from intense international competition. But whenever the SNP is challenged about

these matters, the only answer that we ever get is "Do not worry about these matters. If there were a separate Scottish steel corporation, a separate Scottish shipbuilding corporation, a separate Scottish this, that or the other, all these problems of demand and productivity would be solved."
The electorate can very well see that the SNP's policies in this regard are quite farcical and are designed to separate Scotland—I know that SNP Members do not like the word, but designed to separate they are—from the management of the United Kingdom economy as a whole. They will only make a difficult situation quite disastrous.
Faced as we are with depressed markets, serious dislocation in world trade and intense competition from countries in the Far East, the only hope lies in closer co-operation within the United Kingdom and Western Europe as a whole. A fragmented approach, a separatist approach, will produce only divisive policies, from which I think all of us would suffer.
Therefore, the Government totally reject any attempt by SNP Members to hypothecate the North Sea oil revenues exclusively to Scotland. We have made our position perfectly clear. Oil, like the gas in the Southern Basin before it, is a United Kingdom resource, to be used for the benefit of the United Kingdom as a whole.

Mrs. Winifred Ewing: rose—

Mr. MacKenzie: Perhaps the hon. Lady will forgive me if I do not give way until I have finished this part of my comments. As it happens, I live in Cambuslang, not terribly far away from the hon. Lady's home. She will know that we use gas in our homes which comes from the Southern Basin of the North Sea. We use it all over Glasgow. We do not talk about the English gas which is coming in to supply various homes in Scotland.
To take advantage, as Scotland has done over many years, of being part of the United Kingdom, sharing in the United Kingdom's economic assets and resources, and then to try to keep the benefits of North Sea oil for Scotland alone is not only immoral—irrespective of the work of the Church and Nation


Committee or anyone else—but unworthy of Scotland as a whole. It fits ill with the spirit which enabled Scotland to contribute so much to the United Kingdom and the whole economic and social development of this country in the past. It would be seriously damaging to Scotland's wider economic interests.

Mrs. Winifred Ewing: Does the Minister not see in the slogan "It's Britain's oil" something terribly unacceptable to the EEC member States, who regard it as a European resource and have their greedy eyes on it? Does he see ally thunder cloud affecting his British nationalist stand on oil from the EEC's desire to interfere with the promises which the Government gave me in this House when I asked whether the EEC would affect the rate of extraction of the oil and the right to select our price and our markets? Does he see a threat to British nationalist oil claims?

Mr. MacKenzie: The trouble is that the hon. Lady is confusing her roles. She is today at Westminister representing a Scottish seat and she should for a few moments forget the obvious interest that she has been showing in the European Parliament for all sorts of reasons for some time.
The Scottish economy is closely integrated with the rest of the United Kingdom. The Fraser of Allander Institute of Strathclyde University, headed by Professor David Simpson, shows this beyond doubt in its recent input-output study. Just under half of Scotland's manufacturing output is sold across the border to the rest of the United Kingdom, and nearly half Scotland's consumption of manufactured goods comes from the rest of the United Kingdom. There can therefore be no question of a prosperous Scotland except in a prosperous Britain, despite what SNP candidates and Members may say.
Scotland's problems are essentially the same as those of the rest of Britain. They have common origins in our past industrial structure, our attitudes and our common economic history. They will be overcome only if we recognise them for what they are and work on them until they are overcome. North Sea oil gives us a real opportunity to strengthen our

economy. Even with North Sea oil, that will not be easy. it is not a panacea for all our problems, but it will give us a breathing space and a better chance than we have had at any time since the war.
It is therefore essential that we make the right choices and set out priorities so that North Sea oil gives the maximum benefit to the country. Those priorities have now been decided upon by the Government and were set out in the recent White Paper. We have made it plain that our aim is to promote the expansion of demand and activity to get the economy moving forward.
We certainly intend to redouble our efforts through the industrial strategy to improve the competitive position of our industries by raising investment. We shall maintain and strengthen the impetus of regional policy which has already, despite what the hon. Member for Dundee, East said, made a considerable improvement in the Scottish position. We shall also invest in the future in new replacement forms of energy supply.
Since we came to power in 1974, we have already substantially strengthened the measures available to help the people of Scotland. The Scottish Development Agency, which we established in 1975, in advance of any revenue from the North Sea, is now making a significant impact on the Scottish economic scene. SNP Members constantly ask us to add to its contribution, so I hope they approve of it.
In my own Department, the Scottish Economic Planning Department, we have made offers of selective financial assistance of £97 million in the last few years and have paid out about £373 million of regional development grants, thereby safeguarding and creating thousands of jobs for the people of Scotland.
The difficulties of the current economic situation, both in the international economy and in the United Kingdom, tend to make us overlook what has already been made possible, and the Government's policies have already been influenced by the availability of North Sea oil. It would have been difficult, indeed, perhaps impossible, without it to provide the stimulus of the income tax cuts of the Budget of 1977 or the further stimulus provided last November, which was particularly helpful to the construction industry. Without it the scope for


measures to assist industry through the Industry Act, the SDA and the industrial strategy would have been curtailed and the special measures for job creation which now benefit about 53,000 people in Scotland would have been much reduced.
I recall that this was acknowledged by no less a person than the right hon. Member for Western Isles (Mr. Stewart), who said that the special measures had reduced unemployment in his constituency to the lowest level in his lifetime—and with no disrespect to the right hon. Gentleman, he is no chicken. Therefore, we are already benefiting from North Sea oil to an important extent.
The effects of the measures that we have taken have been more important in Scotland than in the rest of the United Kingdom. We have heard today, as we have heard before, the proposal for an oil development fund for Scotland, but nothing specific or convincing has been said about how it would work, so I conclude that those who propose it have not thought through its implications in great detail.
I have explained why we reject the implications of the words "for Scotland" in the motion as being narrow, selfish and unworthy, but, leaving that aside, the idea of a special fund was considered carefully and at length in our review before the White Paper was published. Quite simply, we consider that what matters is to decide the right priorities for our use of North Sea oil benefits, and for that purpose we consider a fund to be unnecessary.
The policy decisions we need can be taken within the present framework and they must in the end be implemented through our main policy programmes. For a fund to have any effect, it would have to be devoted to the finance of additional items—to things which do not receive sufficient priority in main programmes. If so, it might end up being used in ways which many of us feel would have given poor value for money.

Mr. James Sillars: When the Minister says that an oil development fund was considered, is he saying that the Government considered something which they thought selfish and greedy and is that the reason why it was rejected, or were there other reasons?

Mr. MacKenzie: I have just made the point that we considered the establishment of an oil fund. I am not sure what kind of oil fund my hon. Friend wanted. I think that it was rather different from that envisaged by Members of the SNP, but sometimes I doubt it.
For a fund to have had any effect, it would have had to be devoted to the financing of additional items, which might not have been good value for money. If such items can be justified, it is simpler and more effective to adjust our programmes to take account of them. A fund which merely replaced additional programmes of expenditure would in the end satisfy no one. On balance, therefore, we have concluded that the creation of additional machinery would be artificial and the wrong approach to the country's problems. The right way to use the benefits from the North Sea is to set our priorities as we have done.
The hon. Member for Dundee, East was very loud and long in his criticisms, if not always acute in his understanding of the real issues at stake. Those who pretend without any justification that opportunities have been wasted, that production should have been held back or that revenues should in some way be concentrated solely on Scotland have a duty to say whether they will also oppose the expenditure measures taken by the Government which have been made possible by oil. So far they have not done so, though they have the opportunity in this debate.
For my part, I am satisfied that the policies which the Government have set for the development of North Sea oil are working well. Scotland has benefited substantially already from the employment created from North Sea oil, and will continue to benefit, within the priorities which the Government have set for the use of the revenue and balance of payments benefits.
At the risk of repeating myself, I must say that I still think that this is a selfish and inward-looking motion. I believe that it does not reflect the true attitude of the people of Scotland, who are concerned about the problems of their native land but every bit as concerned about the problems of Merseyside, Wales, the North-East of England and elsewhere. I must also tell the hon. Member for Dundee, East that, just as I think his motion


greedy and selfish, I am convinced that it does not reflect the attitude of the people of Scotland any more than his and his colleagues' conduct in this place in recent days has done.
Not many weeks ago, the Scottish National Party went into the Lobby to ensure that there were even further tax reductions for the well-to-do in this country. Last week, they went into the Lobby with the Tories to try to stop the whole development of devolution. Where, we often ask ourselves, was the old Celtic fervour? Where was the old Celtic radical? Where was old Uncle Donald that night? He was marching hand in hand with the hon. Member for Glasgow, Cathcart (Mr. Taylor).
We have rumbled all of this for a long time. The people of Garscadden rumbled it. The people of Hamilton rumbled it. The people rumbled it in the regional elections. We are rumbling it once again today, and I am sure that I can confidently ask my right hon. and hon. Friends to defeat the motion this evening.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): I feel that I must draw the attention of the House to the fact that this is intended to be a short debate. I still have three Front-Bench speeches and 12 Back-Bench speeches to accommodate within it.

5.11 p.m.

Mr. J. Grimond: I am always glad to take part in a debate about Shetland and Orkney oil. We are prepared to allow the neighbouring islands to have a certain share of our oil funds, but I wish to make clear whose oil it is before we start.
I must take issue with the Minister when he says that the Government are protecting the ratepayers of Orkney and Shetland against the extra expenses to which oil had put them. If he were a ratepayer in Orkney, he would soon find out the truth about that. The rates have risen enormously, and such protection as is offered to the ratepayers has come out of the oil funds, which are supposed to be kept for reinvestment in industry and which have been negotiated by the Islands Council itself with the oil companies.
As for Shetland, it does not seem to be generally realised that so far not a drop

of oil has been landed in Shetland. Nothing has come through the pipelines. The Shetland Islands Council has been put to great difficulty over this because it is not getting the revenue which it expects. I put seriously to the Government that they might look at the question of the derating of the terminals, and they might also support the efforts of the Shetland Islands Council—which, I hope, will be successful—in negotiating with the oil companies some payments before the oil actually comes.
I must tell the House that oil is by no means all benefit. It brings heavy expenses to local communities. It disrupts the life of these communities and of individuals. This is one of the reasons why Orkney is determined not to have the mining of uranium. We feel that we have made our contribution to the minerals of Great Britain, and for an island community to have another part of its land dug up for uranium would, we believe, be totally unjustified.
The motion refers to a Scottish oil development fund. At one time, I think, there was something to be said for that but, in company with the Minister, I did not find many details given today about how this fund would operate. It would be possible for the English, I suppose, to demand a gas development fund, and so one might go on with development funds throughout the country.
Now that we have a Scottish Development Agency, I imagine that it will channel capital investment into Scotland. I am not quite sure whether the proposal is to have another corporation dealing with oil revenues, or what it is. I hope that a lot of the oil revenues will be invested in capital projects, but they must be viable capital projects, and I believe that the best way to ensure that is to see that most of it is done through ordinary commercial channels, which know what they are about.
Secondly, I hope that at any rate funds from somewhere will be made available on a generous scale for research into new sources of energy, such as the waves, the wind and the sun. I know that this is being done. Even in the cooler latitudes of Orkney, there is a man who assures me that he heats his bath water with the sun, though how often he takes a bath is not so far revealed.
These new sources of energy will not add much beauty to the landscape, and I suggest that the ecologists might think of looking at a landscape dotted with windmills and imagine how our coastal waters would look with "ducks" waving in the sea. Nevertheless, investigation of these new sources is important. I do not want to see research done in America duplicated, but I hope that the Government can assure us that they are conscious of the need to carry out research in these directions.
Thirdly, I consider that a considerable proportion of the revenues ought to be made available for local communities and local banks. If they are to make a contribution, at least in the north of Scotland, to the curing of unemployment, this effort must be directed through the smaller firms. Such firms will be in need of capital, and in my view they are much more likely to bring new jobs than the large monopolies would be. Nor are such small firms nearly so vulnerable to industrial blackmail. I hope, therefore, that they will gain from the oil revenues.
I should like to know whether the Government have seen the scheme discribed in Lloyds Bank Review for April this year, under the title "A People's Stake in North Sea Oil", by Brittan and Riley. I do not necessarily agree with it, but for those who are interested in spreading ownership it is of interest. The basic idea is to issue a North Sea oil stock. This would be a marketable stock issued to all adults in the kingdom. I shall not go into the details now, but if the Minister can tell me whether any study has been made, or is to he made, to see whether such a scheme is feasible, I shall be grateful.
I turn now to one or two problems which have arisen in my constituency as a result of oil developments. There is widespread discontent in Shetland over the allowances paid to local people. In-corners get housed in camps, they are fed, they are transported, they get holidays, but few such benefits or equivalent allowances are available to the local people.
I have had complaints also from the Stockton-on-Tees Trades Council about the treatment of workers on the rigs. The council alleges that many people from

that part of England have gone up to work in the Chevron field and that 1,100 workers have been dismissed, many of them within 26 weeks of their engagement. I do not know how far this is the Government's responsibility, but I wish to put on record that there are dissatisfactions with working conditions in this industry. Perhaps the appropriate Ministry will look into it.
In Shetland, the advent of oil has led to a dual economy. There are very high wages for those on oil-related work, while many of the crofters not employed on oil work still have very low wages but have to pay high prices. Oil-related work is taking away workers from crofting, from fishing, from road work, from knitwear and from shopkeeping, and it could have a serious long-term effect in both Orkney and Shetland. This is particularly serious when it is added to the slump in fishing and the uncertainty about that industry's future.
That brings me to a matter of great importance which I must put to the Government, namely, training. Most of the oil-related work—perhaps all of it—is unskilled. Young boys leaving school go out to work, earning £100 a week and getting all sorts of perquisites, but they get no training. When this period is over, they will have high expectations for a standard of life but no skills with which to earn the necessary money. I do not say that at this moment training is vital, but what is vital is that there should be plans for training as the oil construction period runs down. I hope that the Government are giving attention to that.
Again, we must do much more for boys who go into industrial training and take up apprenticeships. I know of one lad who, instead of going into unskilled work —highly paid but an absolute dead end —is training as an apprentice in Lerwick. He comes from another island. He tells me that his take-home pay is £27 per week, out of which he has to pay £17 for digs. He is lucky to get digs as cheap as that. Further, he has to buy his own tools. This is quite absurd, from the point of view of the country and from the point of view of everyone else.
Such treatment compares badly with that afforded to those who go into academic further education. It seems to be entirely wrong for a country which will


have to depend on its skilled industrial workers to tolerate this enormous contrast between what unskilled or academically clever people are paid and what apprentices are paid.
It is important to keep the whole question of oil in perspective. The right hon. and learned Member for Surrey, East (Sir G. Howe) gave some figures the other day pointing out that the net addition to the gross national product arising from oil when at its peak of production would be no more than the Japanese add every six months to their GNP simply by working harder and being more efficient. It is no good investing money unless it is properly used. The trouble with this country is not that there is a total failure to invest. It is that too much money is put into non-productive investment and too much of it is under-used, even when it is in industry.
I would like to see some estimate of the effect of the benefit of natural gas upon the economy. The Minister said that he estimates that oil has done us a lot of good. We have had natural gas for many years now. I believe that about one-third of our energy needs outside of transport are now met by gas and that gas from the North Sea will be equal to about one-third of the energy provided by North Sea oil. If that is so, we ought by now to be able to see, without speculation, what has been the effect on the economy of this gas. It cannot be said that over the past three or four years we have been through a particularly good period. It would be unwise to assume that oil does not bring great problems as well as advantages.
I agree that there are advantages for the terms of trade and so on but oil produces great problems for the local communities and for the country. If there is to be a benefit from oil we have to make sure that the revenue is used for efficient, productive employment. If it makes Britain or Scotland more complacent, and many advertisements for parts of Scotland seem to imply that all problems will be solved by it, oil will do more harm than good.

5.22 p.m.

Mr. George Robertson: This subject is of considerable importance, and not only to the people of Scotland around whom this debate has been

framed. It is important for the people of all of these islands. In discussing the management of oil and the possibilities that it opens up, we have to assess, as the electorate will have to assess at some stage, the credibility of the various parties and the policies they put forward.
Oil is a major national resource which opens up major opportunities for all of us. Each of the programmes put forward by the political parties will have to be judged not just in the context of the view taken of one natural resource but in the context of the development of all natural resources and the revenues accruing from them. Although it is easy for the nationalist party to put forward this motion and to make criticisms of a wide-ranging and penetrating type, the fact is that its alternatives have also to be assessed by the electorate. The programmes that it proposes have to be judged too, not just the criticisms that they throw so negatively against Government policy.
I have been interested in trying to establish, along with many of my hon. Friends, precisely where the Scottish National Party stands in relation to oil. I was not enlightened by the opening speech of the hon. Member for Dundee, East (Mr. Wilson). I am sure that the same is true of many of my hon. Friends. A lot of promises have been made by the Scottish National Party to the people of Scotland. These promises have been specific and have concerned the future that the Scots could expect if or when the bonanza that oil was likely to produce could be directed into the pockets of the Scottish people and not into the Exchequer of the United Kingdom. Ultimately, the acid test of the Scottish National Party's policy will be whether it can deliver the goods. Can it deliver what has been promised? There have been inconsistent and ever-increasing bribes offered to the Scottish people.
I have been trying to establish what the specific promises made by the nationalists concerning oil amount to in view of the election which is not too distant. Promises were made to the electorate of my constituency, as well as to electorates elsewhere to the effect, that the wealth flowing from the oil would produce a doubling of the standard of living of the people. That was said by the second-from-last nationalist candidate in my constituency. It was said in


an SNP publication that oil and oil alone would make Scotland the richest nation per head of population. That came from the election address of 1974.

Mr. Ramesh Watt: Does the hon. Member agree that if we allow the Labour Party to continue in its present profligate ways, Scotland could well be the only nation in the world that has found oil yet finished up the poorer for it?

Mr. Robertson: I do not agree. In that respect, I quote from a document called "A Scottish Government and the Oil Revenues" published by the SNP. This was a document that was given some degree of publicity. It speaks of Holland and on page 8 makes a number of assessments about the impact of national resources on the Dutch economy. It says:
The 'Dutch Disease' is a warning to us. We must avoid frittering away the oil revenue on what appear to be attractive programmes in social capital investment".
What we have had consistently over the years throughout Scotland has been a variation of the promises and the bribes by the party which claims that, with all of the oil revenues directed to the Scottish population, there would be, among other things, a doubling in the standard of living, with Scotland becoming the richest nation per head of population in the world. These are absurd claims which increasingly in recent months the electorate has found to be as fraudulent in practice as they seemed to be on paper.
Let me turn to some of the more specific elements of policy put forward by the SNP. The SNP document "A Scottish Government and the Oil Revenues" is a refreshingly frank, and in some cases honest, publication for an SNP document. It deals with a number of issues and problems which would confront a hypothetical independent Scottish Government. The document breaches for the first time that code of conduct within the SNP which does not allow the concept of separatism ever to arise. Page 3 of the document speaks of assuming:
a level of anger at the break-up of the British state amongst the English electorate.
Clearly and identifiably the SNP is stating what it stands for—the break-up of the British State as we know it. There is an assessment of the consequences on

the British constitution and the cost that would arise as a result of the perceived damage within Britain.
What we are now beginning to see from the depths of SNP policy is an assessment of the negligible effects on the Scottish economy which oil would bring. Instead of speaking of about £7,000 million, which the Scottish electorate has been promised in recent elections, this document, produced in February 1978, says that the oil revenue capacity of the Scottish economy is likely to be only £1,000 million per annum. We are told now that the Scottish economy cannot absorb this and that the maximum that a Scottish Government could expect in year one of so-called independence would be £1·25 billion, in year two £1·4 billion rising to a maximum, in year five, of £1·75 billion.
The whole thesis of this document seems to establish that those are the realistic figures, and not the grandiose promises of £4,000 million, £5,000 million, £6,000 million, ranging up to £10,000 million, made to the Scottish people in previous election manifestos by the SNP. This is the true scale of the benefit that would accrue under the separatist policies of the SNP from oil development.
When one measures the existing needs of the Scottish economy, and establishes the statistical fact—accepted, it would appear, by all parties—that the actual public sector deficit between what is collected in Scotland and what is spent in Scotland in the public sector is about £700 million, the £1,000 million that the SNP now claims would be the maximum in the revenue take from oil can be put into perspective. Out of the remaining element of that has to be financed the creation of a completely separate Government as well as completely separate shipbuilding corporations, aircraft corporations and all the other paraphernalia of a nation State. The whole thing is absurd.

Mr. Sillars: Could my hon. Friend tell us the source of his information for the assessment of a borrowing requirement of £700 million? The last official statistic appeared post the last Hamilton by-election and was about £400 million, and no recent budget has been done by the


Treasury taking account of the contribution from North Sea oil resources—at least, not to my knowledge.

Mr. Robertson: It is not within the context of oil resources that the recent figures seem to suggest that the public sector deficit exists at the moment between £600 million and £700 million. I stand to be corrected if that figure is not accurate. But certainly the figure is at least in excess of the £400 million last published, and undoubtedly, on the basis of studies recently done, it must be nearing the £600 million to £700 million mark. This does not, however, disturb the central thesis of what I am saying—that the scale of the resources available even to a separate Scottish Government would be of negligible proportions in terms of the grandiose plans for social expenditure continually being advanced by the SNP.

Dr. M. S. Miller: I have not had the benefit of reading the document referred to by my hon. Friend. On what basis was that assessment made in relation to the oilfields involved? Is it assumed by the writers of the document that there will be no problem at all in apportioning the number of fields in the North Sea to Scotland?

Mr. Robertson: My hon. Friend makes a very important point. The document, which is crucial to the assessment of this debate, again for almost the first time, makes a detailed study by the SNP of the difficulties and problems that would be associated with negotiating a settlement of the division of the continental shelf. Indeed, the document says:
The 1968 Order
—that is, the Continental Shelf order—
had no other intention than to allocate which law applied where, and it is evident from consideration that—and this would certainly be the stance taken by the English government—allocation of 'sovereign rights' was not included. Moreover, one cannot even work from precedent as none exists.
The document again establishes that there will be major problems and difficulties associated with the
break-up of the British state
—its words, not mine—involved in coming to any political settlement in the short term. So we are talking about solutions which are at best and not at worst.
When we are discussing the problems and difficulties associated with the present Government's conduct of oil policy, we have to relate it integrally to the alternatives being put forward by the SNP, which criticises Government policy so much. As I have said, the problems associated with oil development are clearly established in this document and elsewhere. The Dutch disease is a problem that can be avoided. We in this country must desperately seek to avoid the difficulties and the considerable social problems now being encountered by the Dutch Government following their bonanza period.
Until recently, I was a member of the Board of the Scottish Development Agency, and I believe that at this stage we have no need in this country for a separate oil fund. I concede that the Scottish TUC has promoted the idea of a separate fund, and that the Church of Scotland has from time to time promoted variations of the fund, but the fact is that the majority of the Scottish people would now agree that we have probably reached saturation point with the creation of new institutions taking away the instruments of government from the people and their democratically-elected representatives.
I think that, having created a number of organisations, we must use these existing instruments to further Government policy and to further the restructuring of industry. We have these institutions, and with the funding and with the correct and proper strategy over a period—a longer period than simply four years—we shall be able to build on them.
But empty rhetoric from the SNP will not solve any of the problems we face, in Scotland, and the difficulties being encountered by the Government in their negotiations with the oil companies, and their determination to get a proper and sensible policy for the oil industry, will not be helped simply by carping criticism by those who have no positive or constructive solutions to put forward.
I believe that the Scottish electorate, when eventually given the chance to make an assessment of all the parties' views on this issue, will follow the trend shown of Garscadden, in the regional elections and at Hamilton, and will judge the nationalist policy of separatism and apportionment


of oil revenues. I believe that only a practical programme for the disbursement of oil revenues will be satisfactory to the Scottish people.

5.37 p.m.

Mr. Iain Sproat: I am glad to follow the hon. Member for Hamilton (Mr. Robertson), because he has done a very good demolition job on the vast and ludicrous gap between the cost of all the institutions of a separate Scotland which the Scottish National Party wants and the revenue that would be received from the 10 million tonnes of oil a year, or whatever it is, that the SNP is now proposing as the sort of level that we should extract.
The Minister of State spoke of the selfishness and greed of which the hon. Member for Dundee, East (Mr. Wilson) gave evidence in his speech. But we did not even have to listen to the speech of the hon. Member for Dundee, East, because the title of the debate
The mismanagement of Scotland's oil
was sufficient. It cannot be said often enough that there is no such thing as Scotland's oil. The oil lying off my constituency is no more Aberdeen's oil or Scotland's oil than the coal that lies beneath the fields of Yorkshire or the gas that lies off the coast of Norfolk is Yorkshire coal or Norfolk gas or English coal or English gas. They are all British resources. That is the legal position, and, whatever the Church of Scotland may say, it is certainly not the moral position that Scotland has any right to this oil above any other part of the United Kingdom.
The SNP has been singing an old song again today, but no one is listening any more. The hon. Member for Hamilton—and I am happy that he did—showed that in his own by-election, and it was shown in the Garscadden by-election earlier, too. I do not think that we have to worry very much about the Members sitting on the SNP Bench for much longer.
I want to speak about a subject which concerns me in this whole question of the management of oil—the slow-down in the development of North Sea oil. I give as evidence of that slow-down the following facts. First, in May 1974—that is, shortly after the Labour Government came into power—the Department of Energy forecast in its "Brown Book"

that production in 1977 would be 50 million tonnes. We know that the actual 1977 production was about 38 million tonnes. In other words, there was then about a 25 per cent. shortfall in the Government's forecast. The forecast for 1978 production was given as 80 million tonnes, while the latest Department of Energy projection for this year is between 55 million and 65 million tonnes—a shortfall of between 19 per cent. and 31 per cent.
Secondly, significant discoveries are not being developed. The latest "Brown Book" lists about 49 significant oil discoveries, some going back to 1973, of which only one—Fulmar—is now under development, although no platform has yet been ordered. Thirdly, as another area of evidence in the slowdown, only two permanent platforms for new fields have been ordered in the last four years, for Murchison and Tartan. Recently, the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) predicted that six or seven orders would come to United Kingdom yards in the next 18 months. I very much hope that he is right, but I also hope that, when speaking from the Front Bench later, he will tell us from what fields he expects those six or seven orders to come. The right hon. Gentleman will remember that this time last: year he said that we would have five or six orders in 1977–78, and of those only two have so far materialised.
Given that there is some slowdown in the development of North Sea oil, what are the reasons for it? There is no question but that one of the reasons is that the companies underestimated the complexity and difficulty of the development. There is no shame to them in saying so. But, equally, they have over-extended themselves. I do not think they would deny that.
However, in addition, there are four main reasons which I should like to mention. The first main reason for this slowdown is that the fields are getting smaller and need better fiscal terms. Unfortunately, the terms are getting worse and tighter rather than better. For example, under rounds 5 and 6, companies now must relinquish two-thirds of exploration acreage instead of the 50 per cent. under rounds 1 to 4. I understand that under rounds 5 and 6 the royalty will increase


—not in the sense that the percentage will be increased—in that it will be levied on United Kingdom landed value rather than on the-well head value, as it was under rounds 1 to 4.
Secondly, we all know that in the early days it was necessary to give various assurances to the oil companies to encourage them to get on with the speed of oil development, and quite rightly so. The then Secretary of State for Energy gave a series of assurances on 6th December 1974 which became known as the "Varley guidelines". These guidelines did a great deal to encourage the companies to go ahead with a speed of development which was the optimum speed for this country as a whole.
But, of course, those guidelines no longer apply, and no such assurances are now available for companies considering new developments. Not only are no assurances available, but the present Secretary of State for Energy said on the 5th April this year:
when the oil companies were first coming into the North Sea and their investment was very heavy before the returns came—frontloaded investment, as it is called—it was necessary to give some assurances that those who invested would be able to develop their fields. Therefore, in the early days those assurances were given, relating to fields that were already under development. This was in 1974. As we move into a new phase of oil policy—particularly through private sector development, but this applies more generally —we are freed from assurances given in the past—[Official Report, 5th April 1978; Vol. 947, c. 443.]
In other words, the right hon. Gentleman is completely removing such sense of certainty as had been given by the original Varley guidelines and substituting nothing in their place but uncertainty.
The third reason why I believe that North Sea oil development is slowing down is that the British National Oil Corporation is heavily involved in monitoring other company operations in addition to its own activities. In spite of that, nothing can be done without the approval of BNOC. As an indication of this, it took about 18 months for BNOC and the companies to come to agreement over round 5 operating agreements. Not only is BNOC involved in operating agreements but, first, it holds equity in five oil fields which are under development—which is more than any other com-

pany. Secondly, it is the sole operator in a dozen or more blocks, plus four more in round 6. Thirdly, it has a 51 per cent. interest in 80 or more blocks under rounds 5 and 6 and, fourthly, it has over 50 participation deals to monitor and work out, including involvement in downstream activities.
It is no wonder that, with a staff of about 877, which is the latest figure, and in addition to all its own work which it must do in those four areas, the BNOC does not have the staff or the experience to work out with the companies exactly what is needed in development plans. I am sure that this bureaucratic interference by BNOC, whatever its other virtues or purposes may be, is a major factor in slowing down our North Sea activity. It is interesting that Lord Kearton has said that it takes about 2,500 employees to run a North Sea oil field, yet he is trying to run not only BNOC's own oil fields but everyone else's as well with only 870 employees.
The last reason why development in the North Sea is slowing down is quite simply that the size of the exploration rounds is now far too small. Under round 4 in 1971–72, 282 blocks were awarded. In 1976, under round 5, that had shrunk to 44 blocks awarded. Under round 6 this year, only 40 blocks have been offered and historically only about one-third are awarded in the end. Small rounds mean few attractive prospects, and few attractive prospects mean less exploration.
Having said that there is evidence of a slowdown in North Sea oil development, and having shown some of the reasons why that has taken place, I should like to say why I consider this to be a very serious problem for our country, regardless of who the Government of the day may be. The problem for the United Kingdom in the future is that there will be less oil by the mid-1980s than expected. Indeed, we are already getting less oil than expected. Since the bigger oilfields will start to decline in the mid-1980s, it should have been our policy to get the many smaller oilfields developing in their place in order to replace that decline. As I said, out of the 49 significant fields which should be brought into operation in the 1982–1988 period to offset the decline in the big fields, such as Brent, Forties and Ninian, it looks as if only three or four will be commercial.
I am not saying that the tax regime for the larger fields should be altered or diminished. But I urge the right hon. Gentleman to look again at the possibility of at least making the tax regime easier for the smaller and marginal fields, so that we can at least encourage development in those smaller fields when the bigger fields decline.

5.50 p.m.

Mr. James Siliars: The debate and the exchanges so far in the debate have demonstrated that Scottish National Party Members are now paying a fairly heavy political price for having over-stated the case on oil shortly after the discovery of the oilfields in the North Sea and early assessments of the magnitude of flow both of oil and of money.
In the 1970 period, it is fair to say, the SNP must have fielded a number of fairly inexperienced candidates who gave more than a fair share of hostages to fortune in relation to the assessment of what oil would bring. I remember reading in one of the Cumbernauld papers a constituent writing to the hon. Lady who now represents that area saying that after independence perhaps she would be good enough to post to him his Littlewoods coupon every week on a Friday because he liked to pick up his pay on that day. Certainly SNP candidates gave the impression that after independence every Scottish kitchen sink instead of having two taps, would have four—hot and cold, and petrol and whisky as well.
But SNP Members have advanced from that position, and people would be very foolish to write off a party which got roughly 33 per cent. of the vote in two parliamentary by-elections on the straight case of independence or non-independence. I have heard the party written off in this House and elsewhere far too often to believe that it is likely to go away.
As the speech of the hon. Member for Dundee, East (Mr. Wilson) demonstrated, however, the case today is not being overstated to the same extent. Under what I regard as the grindstone of the critique applied by both the Labour Party and the Conservative Party, the Scottish National Party is coming nearer to reality in respect of what Scottish oil can or cannot do in the Scottish economy, although, if the assessment quoted by my hon. Friend the Member for Hamilton (Mr. Robertson) is

correct about the ability of the Scottish economy to absorb £1,000 million per annum, it is still probably about £500 million per annum over-stating the case when it refers to the capacity of the Scottish economy to absorb that magnitude of additional resources. Economists to whom I have talked have said that we could absorb about an additional £500 million without having a massive effect upon the rate of inflation. But, of course, that figure is open to argument.

Mrs. Winifred Ewing: Does not the hon. Member agree that, when we are talking figures, one of the more striking features about the oil development in the North Sea is the gross under-estimate which was made by both the Labour and Conservative Parties when they ridiculed the homework of the SNP about the amount of oil in the sea which turned out. as we always said, to be on a conservative basis? Those two parties went on record as saying that we were exaggerating the amount of oil.

Mr. Sillars: I can speak only from my experience from inside the Labour Party. I took part in a party political broadcast in February 1974 in the course of which the question of North Sea oil was raised, and we were given a briefing background paper. As far as I can recall, the Labour Party's research staff was pretty accurate about its assessment of the magnitude of the wealth flowing from the oil.
However, my purpose is not to defend the SNP. I do not agree with it about the oil revenues being diverted into the Scottish economy. As a Socialist, I have no desire to see Scottish prosperity built upon English penury, but I shall support the SNP in the Division Lobby, and I shall explain why.
My contribution to this debate is directed towards three objectives which I believe it is necessary to establish if the SNP motion is to be supported. The first is to justify the Scottish claim to a significant proportion of the oil revenues. The second is to state what could and should be done with an oil-financed development fund. The third is to restate some basic principles about full employment, because the argument about how we engage in management of the economy is in my view for one major purpose, which is to produce full employment with all the


implications inherent in it for the Scottish working class.
My support of the Scottish claim to a significant proportion of oil revenues is based on the proposition that oil won from under Scottish waters is as much an indigenous Scottish resource as the fish hauled out of those waters and the coal cut from under those waters off the coast of Fife.
I forecast that one day it will be recognised generally as a Scottish industry. That will be when the oil activity abates and the Scottish economy is left with the problem of rehabilitating the individuals, the work forces and the communities presently built up around the oil industry. I know that the retort is often "So what?" In a sense, we got that from the hon. Member for Aberdeen, South (Mr. Sproat). He gave us the cry about the Selby coalfield. I believe that the answer to that was given far more eloquently by my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray), who made what I regarded as a most significant and, for some of my hon. Friends, a most disturbing speech on 30th October 1974. It was his first speech in this Parliament as the newly-elected Member for his constituency. His answer to that kind of charge was as follows, and I have given notice to my hon. Friend of my intention to quote his remarks:
Nor is it any answer to point to other resources and industries in other parts of Britain which are equally needed in an industrial economy and to argue that Yorkshire coal, Welsh water or Cornish clay afford equal opportunities for regional control of resources. They do not. Oil is unique as a major commodity in having a market price far above its production cost, thus giving it command over other resources and playing a special role in power politics."—[Official Report, 30th October 1974; Vol. 880, c. 275–6.]
My hon. Friend described oil as having a special role in politics. That special role arises in the Scottish context because of its potential use in allowing us to break free from the perpetual cycle of decline and despair which has been the lot of the Scottish people in the context of the Scottish economy. That was mentioned most forcefully by Professor Donald MacKay, who used to be the professor at Aberdeen University and now takes the chair at Heriot-Watt. In a paper which he produced entitled "North Sea Oil and

the Scottish Economy in 1974", he summed it up by saying about oil:
It is a possible escape from the depressing economic record of Scotland over the last half century. Quite frankly, it is seen as a means of redressing the balance of economic, industrial and commercial power within the UK in favour of Scotland.
Later in that same paper, describing Scotland as a slow-growing region in a slow-growing national economy, he said:
Between 1950 and 1970, the following countries in Western Europe, all of whom had lower per capita income in 1950, had caught us up and surpassed us; Norway, Iceland, Denmark, Belgium, Holland, Austria, France, West Germany and Luxembourg.
If we are to redress that balance and to allocate part of the oil resources, and if there is to be any call on those resources, it must be on the basis of need. I regard it as self-evident that if a nation's industrial-based economy is undergoing a rapid process of de-industrialisation, if its social and economic infrastructure are widely acknowledged to be seriously deficient, and if its people are enduring levels of unemployment unheard of in post-war years, that economy should have the first call on resources discovered and exploited within its land or its sea area.
All the elements of decline are there. The need is very clearly established. Let me again quote from the speech of my hon. Friend the Member for Motherwell and Wishaw on 30th October:
The allocation must start not from the resource end but, as we are Socialists, from the need end. Let there be an inventory of the assets and current expenditure, and of social needs enjoyed or suffered by the several nations, regions and classes within Britain as a whole, and, indeed, of personal wealth and incomes too. Let the objective be set of bringing these up to a common level within a number of years, with the allocation of resources then made on the basis of social need.
My hon. Friend went on:
On this basis I believe that Scotland, Wales and parts of England would justly enjoy a substantial premium for many years over their present share of the national income."—[Official Report, 30th October 1974; Vol. 880, c. 277–78.]
I have not quoted him out of context, and I am not suggesting that he will necessarily agree with the conclusions that I draw from this debate.
I want to take a few seconds to provide detailed proof of why Scotland—and Wales and parts of England as well—should enjoy what my hon. Friend called


"a substantial premium". We have in Scotland 187,000 registered unemployed. The true figure is around 200,000. In the past 20 years, 200,000 jobs have been lost in the key industries of coal, steel, shipbuilding, vehicle manufacturing, textiles and agriculture.
In the decade between 1965 and 1975 employment fell by 40,000 in total. The number of male jobs fell by 133.000. By mid-1976 the manufacturing share of total employment had fallen below 30 per cent. for the first time in living memory. Since the mid-1960s more than 110,000 manufacturing jobs have been lost. Recently the Strathclyde Regional Council forecast that we are in danger of losing another 65,000 manufacturing jobs in West Central Scotland by 1983. Since Labour won the last election Scottish unemployment has doubled.
The effect of all this is that we have massive redundancies, high overall unemployment and high concentrations of jobless in certain areas. Although the unemployment figure for Scotland is 8·4 per cent., there are areas of male unemployment of 25 per cent. to 40 per cent. This has had a corrosive and debilitating effect on Scottish society. According to the Strathclyde Regional Council, one in 10 children in that area are born into deprivation. There are 21 areas of multiple deprivation in the United Kingdom, 18 of which are in Scotland.
Given that situation, I have no feelings of guilt, shame or greed—in fact I am as selfish or unselfish as the Scottish Trades Union Congress—in demanding a share of this new basic resource for the Scottish economy. Since the taxation settlement between the Government and the multinational oil companies there has been precious little, if any, protest in this House or outside about the vast amount of wealth and the vast quantity of oil allocated to the multinational oil companies.
There is no director or executive from BP or any other oil company who lives in an area of multiple deprivation. These people do not have children who are in composite classes because of cuts in education, and none of the international super-class has been ravaged by high unemployment. Yet all these experiences have been the fate of thousands of families in Scotland.
Therefore, the claim is justified that if the multinational oil companies are entitled to their cut of the wealth from North Sea oil, so are the Scottish people. If we do not get our substantial share of that resource the Scottish economy and the state of the people will continue to decline.
With the injection of a massive amount of capital and the adoption of a Socialist policy—that is, production for need, as well as production for profit when manifestly production for profit only has failed people—we can transform the situation within the Scottish economy in a remarkably short period. I think that we should pump £400 million to £500 million a year, year on year, into the Scottish economy to transform it and create full employment.
It is fashionable for so-called Socialists to pray in aid the international recession and use that as a total excuse for Scottish unemployment and the decline in our economy. There was more than a tinge of that in the speech of the Minister of State this afternoon. These people conveniently overlook the fact that the Scottish economy has been in decline under both Labour and Tory Governments during periods when the rest of the world has enjoyed boom conditions.
Faced with their own inability to provide Socialist solutions to the problems created by international capitalism, these people feel that they must try to persuade the people to accept what would be normally unacceptable. What would be the situation tonight if the Tories were in power, Labour was in opposition and there were 187,000 Scots unemployed? If Scottish unemployment had doubled in four years under a Conservative Government the Benches would be packed tonight and there would be no acceptance of an international recession or any excuse like that.
It may be that in some areas we would be forced to accept the unacceptable. If we lived in Southern Italy, Northern France, Malta, Greece, Portugal and, dare I say it, Peru, and if we were citizens of those countries we would have to accept the unacceptable. I am not in possession of sufficient knowledge of their economies to judge, but I am in possession of sufficient knowledge of the Scottish economy to judge that this is not


the case in Scotland. We do not need to accept the unacceptable. We have oil-based resources and an abundance of manpower and engineering skills. We have vast areas of need in Scottish society. What we lack is the political will to put them all together and overcome the problem.
I am not saying that there is a short-term solution to half a century of problems. Nor am I saying that some of the long-term problems of Scotland, together with those of other parts of the white West can be easily solved especially as the world's balance of power changes from north to south. But I am saying that there is a short-term solution to the immediate, appalling problem of high unemployment and social decay in certain areas, as well as the poor social and economic infrastructure.
We can create the basis to overcome some of the long-term challenges before us. It is possible to create full employment in the short term in Scotland by a major public works programme. That is what I mean by producing for need and not for profit. We should have a programme embracing housing improvements and new housing construction. We should have a vast expansion of the roads programme and a fundamental tackling of the railway system—improvements in railway track, signalling and rolling stock. We should have hospital renovation, especially for geriatrics and the mentally ill. We should have an advancement of the district general hospital programme, most of which has been lying in abeyance since 1962.
If we got a share of the oil revenue and we had the political will to engage in a public works programme of that size we would create work and stimulate the private sector. That should cheer the Tories. It would leave us at the end of the day with a superb social and economic infrastructure.
There would be the multiplier effect of a single public works project. If we built a district general hospital of 700 beds costing between £8 million and £9 million it would require 20,700 square metres of blockwork, 850 tonnes of steel, and 26,300 square metres of floors and slabs. It would require 11 miles of electrical wiring, and 9,300 square metres of gravel and paving. In the Scottish economy,

with its large public sector, when one engages in a major public works programme one stimulates the building and steel industries and one also employs architects, electricians, joiners, plumbers and those who operate earth-moving machinery. One gets the whole Scottish economy on the move—perhaps for the first time in several years. That is all capable of being undertaken if we have an oil-financed development fund.
All my arguments are directed towards four aims. The first is that we should raise industrial activity to new levels; the second is that we should give new strength to our industrial base; the third is that we should establish a superior infrastructure as one of the prerequisites for a more thorough-going solution to our long-term economic objectives; and the fourth aim, the most important of all, is that we should seek to re-establish the right to work and full employment for the Scottish working people.
In my view, full employment is the key factor in human life. The basic conditions and circumstances of working people have not changed a great deal. All we have to sell is our labour. Whether we can sell our labour and under what conditions governs the character of our life style. That requirement determines what constraints will be removed or imposed on ordinary individuals because it affects personal, intellectual and cultural development.
The right to work and a decent job at a decent wage are fundamental to all the other rights and civil liberties which working-class people believe they should enjoy. Without the right to work and to obtain a good return for our labour, all the other rights of which we speak and all our liberties are seriously diminished.
I question whether we have an equal society when in one part of the same town a man in full employment is on a middle-class income but in another part of the same town a man may have exhausted his unemployment benefit and may be existing on supplementary benefit. In theory, those two men have equality of opportunity and rights. But that is only a theory; it does not happen in practice.
Prolonged unemployment makes a person less of a personality, especially in his own eyes. I was recently visited in my constituency surgery by a man who had


worked extremely hard in the building industry almost all his life. That man has now been unemployed for a year, with no prospect of employment. He came to see me about his circumstances. The important thing I noted was the deterioration in the personality of that man, a man whom I have known for some time. Strangely enough, above all he blamed himself and he told me that he was losing self-pride and self-confidence.
I have never read a more eloquent telling, or moving commentary than that which appeared in Labour Weekly in July 1974, as the Labour Party geared itself for the General Election in October. It was a Labour Weekly "Extra" which carried the headline:
Heath's one million unemployed. Don't let it happen again.
The great irony is that it never has, because the figure has been 1·3 million to 1·4 million unemployed.
Let me quote from that edition of Labour Weekly:
Labour's message is quite clear: Don't let it happen again.
The Labour Government has made an immediate start in tackling the grave problems we are facing. It has put forward the solutions it sees to these problems. It wants to get on with them.
The theme of this broadsheet is jobs—because the greatest problem in this country and the top priority for this Government is still the danger of unemployment.
Labour is scared of unemployment. Like the millions of ordinary people who lived through the Thirties, the memories of Labour MPs and Ministers are haunted by the dole queues that scarred society then.
Then comes the eloquent moving part of the article:
It isn't just the hardship and the cut in living standards. It's the indignity that is inflicted and the self-respect that is taken away. It is also the stupidity of keeping people idle and wasting human resources when the country faces grave economic problems.
Labours proposals are geared to the problem of jobs, of the regions which still have high unemployment, of the need for training and re-training, of investment.
And Labour believes that it is not with new and radical policies, and not with the discredited policies of the past, that the solutions will be found.
The article concludes:
New methods, new policies and a new understanding are needed if we are to get a grip on these new problems of our economy.
An oil-financed development fund and a public works programme would provide

new methods, new policies and a new understanding. However, because the Government have turned away from that opportunity, I intend to vote for this motion.

6.15 p.m.

Mr. Hamish Gray: The hon. Member for South Ayrshire (Mr. Sillars) will forgive me if I do not take up the whole of his argument, but I hope in my speech to discuss one or two of his comments.
Perhaps I may remind the hon. Gentleman, since he was critical of the multinational oil companies, that until January 1976 94 per cent. of the total investment in the North Sea came from private sources—in other words, from oil companies and private investment. That investment has provided many of the jobs to which the hon. Gentleman referred. That is too easily forgotten in the dogma of Socialist politics.
This motion is based on a false premise. For that reason the Conservative Party will not support it. My hon. Friend the Member for Aberdeen, South (Mr. Sproat) gave the reason when he said that the motion refers to "Scotland's oil". We do not accept that it is Scotland's oil. Therefore, we believe that the whole motion is false. The people of Scotland do not wish to be separate, as has been well and truly proved recently. The motion is also weak in that sense.
On the other hand, we have every sympathy with the Scottish National Party in its round condemnation of the Government for their failure to control unemployment. I shall not go into that matter in great detail because the hon. Member for South Ayrshire dealt with it adequately and effectively. The Labour Government should also be condemned for their failure to achieve sufficient industrial growth.
Let me refer to the recently issued unemployment figure totalling 187,150. In January of this year unemployment rose to 203,629. As the hon. Gentleman rightly said, if Labour had been in opposition and those figures of unemployment had been reached under a Conservative Government there would have been marches to the House of Commons every week. It is a ridiculous figure.
The Minister of State spoke complacently, as though everything in the


garden was lovely, and yet he is a member of a Government who, when in Opposition, condemned the Conservative Government when unemployment in Scotland was 89,700. The Labour Government had the audacity to allow that figure to reach 203,000 in January, and to date it is still 187,000. This is a very serious situation.
This figure is the result of the Government's policies. It is perhaps misleading for the SNP to attack and condemn the Government so severely on this subject when all too frequently the SNP is in sympathy with many of the Government's ideas. Indeed, the SNP's own policies would create even more unemployment. I remind SNP Members that 60 per cent. of Scotland's manufacturing industry is in firms owned outside Scotland. Great difficulties would arise if SNP policies were followed to their logical conclusion.
I wish to take up a point made by the hon. Member for Dundee, East (Mr. Wilson) on depletion policy. If SNP Members insist on a reduction in the rate of the depletion of oil, inevitably they will create more unemployment. If we cut back to the extent suggested by the hon. Member for Dundee, East there will inevitably be a loss of jobs.
Petrochemicals in Scotland, especially in the Highlands, have been referred to. I hope that there will be developments in this industry. There are proposals relating to Nigg Bay, in my constituency. I recently met the company involved and was told that there are considerable developments in the offing, but for reasons of commercial confidentiality the company is naturally unable to make public what is happening. There is great interest in the area, and I look forward to positive developments before too long.
We have become used to hearing the SNP refer to Norway as a model in handling oil policy, but Norway is having a complete re-think and it seems almost certain that it will try to make changes before long. Exploration drilling has been low throughout the 1970s. Only one oil field, Ekofisk, and one gas field, Frigg, are in production. In the United Kingdom sector there are eight oil fields

and seven gas fields in production, and a further eight fields are being developed.
Norway appears to have fallen into a trap, and I suspect that the hon. Members for Dundee, East and South Ayrshire could easily fall into the same trap. It all hinges on the attitude of ensuring that high extraction rate is initially attained and then cutting back to suit the situation that has been created. That is precisely what has happened in Norway. It is committed to a high extraction rate and cannot escape from it because the spending policies of the Norwegian Government make it necessary to maintain that rate of depletion.
There was an article in The Scotsman on 13th June by Mr. Tony MacKay, of the Institute for the Study of Sparsely Populated Areas. He operates from Aberdeen University, and was an associate of Professor Donald MacKay, who was referred to earlier. Mr. MacKay examined the failure of Norwegian oil policies and said, in his article:
The main problem is that through their expenditure policies the Norwegian Government have committed themselves to a fairly high and steady rate of oil and gas production, certainly considerably higher than the present level.
He described how, between 1974 and 1977, Norway achieved an annual rate of growth of 4 per cent. and how its unemployment fell to 1 per cent. That was achieved on the assumption that Government income from oil and gas in the late 1970s would be very high. But that did not happen, and that is why trouble has occurred for Norway, which is facing large balance of payments problems. There was another article in The Scotsman on 15th April which highlighted the problems faced by the Norwegians and reported that
Norwegians face a four-year freeze in living standards under a Government plan announced today to rescue the ailing economy.
These are facts. There is no doubt that this situation has been brought about largely because of the policies adopted by Norway in the early stages.
The SNP policies would signal even greater dangers. In its pamphlet "Building Scotland's Future", the SNP proposes to finance a Scottish Ministry of Industrial Development, at a cost of over £700 million per annum, and to provide a basic pension of £25 a week for a single


person and £35 a week for a married couple. That is uncosted, but I have done some rough costing and I estimate that the cost of that proposal would be another £285 million.
The SNP suggests that it will put an extra £150 million into modern schools, hospitals, and so on, over the next five years. Let us say that this will cost another £30 million a year. There is a proposal to cut income tax by 12 per cent., which will cost about £150 million a year. The SNP says that it will create 130,000 new jobs over five years. The only way of assessing the cost of that proposal is to consider the regional aid that Scotland has received recently. In 1974–75 it totalled £146 million and in 1976–77 the aid amounted to £215 million. A rough estimate of the cost of the proposal to create new jobs would be £200 million.
The increase in expenditure involved in those proposals is £1,365 million per annum. I can assure the House that that figure relates to only one SNP pamphlet. It does not take into account all the other things that the SNP proposes. The party has reached the stage in Scotland where if anyone suggests something he wants, the Scottish National Party will claim that it can be provided from oil funds. It has become a total farce, and slowly but surely the people of Scotland are seeing through all these bogus arguments.
The Minister referred to the licensing policies of former Governments and particularly to the licences issued by the previous Conservative Government. I suggest that if the terms of the licences issued by that Conservative Government had not been as attractive as they were we would not be enjoying the benefits of North Sea oil today. There is no doubt about that. It was suggested that we issued licences without any thought of petroleum revenue tax. The biggest oilfield in the North Sea is the Forties field, and the licences there were issued by the Labour Government—without any question of petroleum revenue tax. Those who claim credit for the sun must accept responsibility when it rains.

Mrs. Winifred Ewing: rose—

Dr. Mahon: Here comes the snow.

Mrs. Ewing: Does the hon. Member for Ross and Cromarty (Mr. Gray) accept

the report of the Public Accounts Committee which criticised the Conservative Government's issuing of licences? Does he accept that when the SNP was making conservative estimates of the amount of oil, the Conservatives ridiculed us as overestimating the amount? As things have turned out, there is, as we thought, far more oil than we estimated.

Mr. Gray: I do not disagree with the hon. Lady. That is a fair comment, but any estimates of oil reserves must, to a great extent, be guesswork. For example, many estimates have been condemned by Professor Peter O'Dell, who has always said that the estimates of the SNP, the oil companies and the Government were much lower than the figures that he considered to be realistic. The BP field has been much more productive than was ever considered likely, but this works both ways, and there are other fields where the yield will not be as great as was hoped.
I must put the record straight on petroleum revenue tax, because the Minister was a little unfair in what he said about the previous Conservative Government. In the Budget Statement on 6th March 1973, the then Chancellor of the Exchequer, Mr. Tony Barber, made clear that it was the Government's intention to bring in legislation to ensure that Continental Shelf operations would be brought within the United Kingdom tax system where the operating company was non-resident, that artificial losses made by oil companies abroad would not be offset against United Kingdom tax liability, and that the take from oil operations would be increased. He made clear that there was no likelihood of oil coming ashore before 1975 and that therefore there was ample time to deal with these matters.
As the hon. Member for Dundee, East said, to a large extent the present Government followed the policy outlined by Mr. Barber. It was they who introduced PRT. Between 1964 and 1970 the Labour Government introduced licences on exactly the same tax basis as those introduced by the Conservative Government. It is as a result of the policies followed and licences introduced by the former Conservative Government that investment was attracted, that exploration was ensured and development was encouraged. The United Kingdom is now reaping


the rewards of constantly increasing oil production.
The amount of investment that has taken place in the North Sea is enormous. We want to encourage more, but if we are to ensure that there is continuing investment in the North Sea we must give careful consideration to the incentives that we can provide. One suggestion is that the Government must devise some means of encouraging more development in marginal fields. At present we have massive investment in the good fields, but when that oil is only partially depleted we should be giving priority to the marginal fields, in which there are considerable reserves.
The Minister of State was extremely unfair in some of his remarks about infrastructure. Many of the improvements that have taken place were planned by the former Conservative Government. I am not surprised—I am sure that the SNP is not surprised—that the Government sit back and try to take the credit for everything. They want to divert attention from unemployment, which is the lethal part of the motion. The Government have wasted money. As the hon. Member for Dundee, East said, they wasted £25 million on Hunterston and Portavadie, which were never used and which never will be used. We have yards in this country, both for steel and concrete, that are capable of meeting any demands that are likely to be made of them.
I condemn the Government along with the proposer of the motion the hon. Member for Dundee, East, for their failure to deal with unemployment and to attract adequate industrial development. Equally, I condemn the Scottish National Party for what could almost be called its racist policies on oil.

6.33 p.m.

Mr. William Hamilton: It seems that we are all condemning one another. I shall be no exception to that rule, but I shall be different to the extent that I, a Labour Member, shall be critical, to a degree, of the Government's present policies.
It is idle to presume that there is any easy solution to the unemployment problem that has been repeatedly referred to by all those who have spoken in the debate, or to the challenges arising from the facilities provided by North Sea oil and gas.
I felt that the hon. Member for Dundee, East (Mr. Wilson) missed a great opportunity by keeping the debate rather narrower than it need have been. It could have been debate on overall energy provision, either in the United Kingdom or in Scotland. If that course had been taken we would have had a much better debate. Having restricted it to North Sea oil—the hon. Gentleman called it Scottish oil—he proceeded to give us his solution to the problem of Scottish unemployment. He suggested that we should slow down the production of North Sea oil.
That suggestion was complementary to the remarks made by his hon. Friend the Member for Perth and East Perthshire (Mr. Crawford), when members of the Finance Bill Committee discussed further tax concessions for those receiving £7,000 and more per year. The hon. Member for Perth and East Perthshire said that to provide the jobs that are needed in Scotland we shall have to give substantial tax concessions to those earning over £10,000 a year. That would go down very well with working people in Scotland, employed or unemployed! If that is the contribution that the SNP wishes to make to the problem of unemployment in Scotland, it had better think again about its policies.
The Tory Party is making all the capital that it can out of the unemployment problem. The hon. Member for South Ayrshire (Mr. Sillars) makes the predictable charge that it is Socialist policies that are wanted, as if that shibboleth, that slogan, will solve our problems. I am as good a Socialist as the hon. Gentleman. I have been a Socialist for longer than he, because I am older. I make no virtue of that. However, I understand that merely to sloganise is not to solve the problem.
It is no good anybody pretending that capitalism, Socialism or any other "ism" can get us out of the unemployment problem. It is not facile escapism to say that it is an international problem. Nor is it enough to say that it is the international crisis of capitalism. The problem exists in States that claim to be Socialist as well as in capitalist States.
It is a world-wide problem and it is impossible to seek to solve it on a purely nationalist basis. That is why my right hon. Friend the Prime Minister is moving


around the world. He will be visiting Europe this month and next month to get together with other international statesmen to ascertain whether we can find solutions to our problems.
The hon. Member for Aberdeen, South (Mr. Sproat) talked about problems within the oil industry and about energy problems generally. At least I can argue with and differ from the hon. Gentleman. He talked about evidence of a slow-down in the development of North Sea oil and attributed that, in part, to the Government's fiscal policies. I recommend the hon. Gentleman to read the debate that took place in another place on 8th February, when the contrary view was expressed by great experts on energy matters. It was said that the development had reached its maximum and would probably flatten out not because it could not proceed at a faster speed but because of increased costs and the relative lack of expertise.
Lord Balogh said that there is no oil-producing country in the world as liberal in its fiscal policies towards the oil companies as is the United Kingdom. He added that in public the oil companies are bound to bellyache and complain about the penal tax system but that privately they recognise that they are on a winner. Not all the armies in the world will drive the oil companies from the North Sea. The Government should tighten up their tax policies and the tax that they are taking on behalf of the British people. The British National Oil Corporation, the royalties and the taxation are not enough to get control of a valuable resource for the use of the British people.
It is not so many years ago that the hon. Member for Ayrshire, South had a great belief in the Labour Party. He did not believe one word that the SNP was saying. I venture to suggest that after the next General Election he will be in that party. His speech today was almost an invitation to himself to join it.

Mr. Sillars: To ease the hon. Gentleman's anxiety I put it on the record that in no way would I be a member of a non-Socialist party. That is one of the reasons that caused me to leave the Labour Party.

Mr. Hamilton: I should very much welcome the hon. Gentleman's leaving

the Labour Party now. In fact, I think that he will get the boot very soon. I hope that he does. The proper course, having made that speech, is for him to get into the SNP, despite the document that he produced two or three years ago "Do not butcher Scotland's future". The arguments that he adduced in that pamphlet are as relevant today as when he wrote it.
The hon. Member for Dundee, East should have learned the lessons of the last two or three months. Politically, in Scotland public opinion polls, by-election and regional election results indicate that the SNP has lost all credibility. The reasons are not far to seek. The SNP constantly appeals to the baser motives of the Scottish people—greed, envy, and the rest. I wonder whether the hon. Member believes even a fraction of what he said about the exploitation of the Scottish people. The word used in London is "colonials". That is the kind of emotive language that the Scottish nationalists use.
I suggest that the hon. Gentleman should pay a visit to Glenrothes. He will there see an enormous diversity of industry. Since the war Fife has built up the greatest concentration of electronics industries in the world outside California. That may surprise the hon. Gentleman. That has been done under successive Governments who believed in regional policies. I give no particular credit to the Labour Government, but they played a large part in putting the new towns legislation on the statute book. It is one of the greatest social concepts that the world has seen since the war.

Mr. George Robertson: Will my hon. Friend give way?

Mr. Hamilton: No. The Scottish new towns have been visited by statesmen and politicians from every country in the world because of the diversification of industry in those places due to the policies of successive Governments. Glenrothes has ridden out the economic recession more successfully than have most other parts of the United Kingdom. For the hon. Member for Dundee, East to denigrate what has happened in Scotland since the war under successive Governments is to do a disservice to both major parties in this country, particularly the Labour Party.
My right hon. Friend the Minister of State put this problem in its proper perspective when he talked about its being international. It is no use seeking to pretend that this resource is exclusively for the use of 5 million people who live north of an arbitrary line on a map. The right hon. Member for Orkney and Shetland (Mr. Grimond) made the valid point that if that game were to be played the Orkneys have a greater claim to the oil than anyone in Glasgow or Edinburgh.
We do not regard these resources as any more Scottish than the coal in Yorkshire or whatever resource happens to be around our shores. This approach to the problem makes good economic and Socialist sense, and it makes for good morality. If we have a resource within the sovereignty of the United Kingdom, it makes good sense to say that the wealth accruing from that resource shall be allocated not according to accent, or to where people live, or to what they believe, but according to what they need. That is the basic philosophy of the Labour Party. Indeed, that is what the Government are trying to achieve.
The hon. Member for Dundee, East talked about North Sea oil being a damp squib for Scotland. I do not know where he has been all these years. Even in the last two or three years, the evidence has been all round for us to see. Thousands of jobs have been created.
The Economist, on 18th February, referring to the number of new jobs that had been provided in Scotland as a result of oil, gave a figure of 60,000. The article stated:
For comparison, mining employs about 35,000 people".
Therefore, the number of new jobs created by the discovery of oil is about double the number of jobs in coal mining in Scotland. In farming there are about 50,000 jobs. Therefore, the number of new oil-related jobs in Scotland is greater than the total number employed in agriculture throughout Scotland.
The article went on:
Output per employee in direct oil jobs seems to have been about twice the Scottish average. The total market for offshore supplies is reckoned at around £1 billion a year. Locational advantages, judicious arm-twisting by the Government, and the work of the Offshore Sup-

plies Office and others in helping to get orders, have meant that well over half of this sum has been spent within Scotland.
These are the advantages which have accrued to Scotland.
The article went on to point out that after this initial development the next phase would be the downstream development, of which we have a good example coming to Fife with the petrochemical complex at Moss Morran, to which the hon. Member for Dundee, East referred. I remind the hon. Gentleman that when that announcement was made the SNP candidate in Fife came out firmly against it. There was to be a prospective investment of £400 million in that part of Fife, and the SNP opposed it. Therefore, it does not lie in the hon. Gentleman's mouth to condemn the Government. The three Labour councils—Dunfermline District Council, Kirkaldy District Council and Fife Regional Council— were putting pressure on the Secretary of State to get on with that development. My right hon. Friend is under considerable difficulties, but he knows how we feel about it. The SNP should not say that we are against the development. If anyone is opposed to it, it is the SNP.

Mr. David Lambie: Surely my hon. Friend recognises that this is traditional SNP policy. It has opposed petrochemical development at Hunterston. Indeed, at the public inquiry at Hunterston Scottish nationalists gave evidence against petrochemical development. In the last regional election their candidate—luckily, she was heavily defeated—came out openly against petrochemical development at Hunterston. Cunninghame District Council, which is SNP controlled, is still saying that it does not want petrochemical development. We should not be surprised at the policy of the SNP. The Scottish nationalists have a different policy for every constituency to suit local needs.

Mr. Hamilton: My hon. Friend has underlined what I said. Following that condemnation of the petrochemical complex in Fife, the SNP kicked out its candidate. Now it has another. For all I know, its policy has changed as well. Indeed, the SNP issued a statement saying that it has been in favour of Moss Morran all the time. That is the kind of


topsy-turvy change, switching and turning upside down, that the people of Scotland have now rumbled. That is the reason for recent election results.
The facility at Moss Morran is important to Scotland. The Provost of Dunfermline went on record on that subject in the Dunfermline Press last weekend. The report states that
Although the final decision has still to be made on the proposed petrochemical complex at Moss Morran and Braefoot Bay, there are already indications that the project, if it goes ahead, could bring an industrial boom in its wake.
Provost Les Wood said this week that, since the start of the year, over 50 inquiries had been received about the possibility of sites for industry in Dunfermline District. 'Some of these inquiries are from firms in oil related industries, but it is obvious that all of them are aware of the Shell-Esso proposals at the moment before the Secretary of State,' he said.
He went on:
We are convinced from what we have experienced already in the way of inquiries about sites, that there is virtually certain to be downstream industry, if the gas separation and cracker plant projects go ahead. It seems that the go-ahead for the projects could be the start of a new boom for West Fife.
I believe that to be profoundly true. That is the kind of thing that the SNP came out against.
I wish to quote from an article that appeared in The Times of 15th November last year dealing with the then latest literature of the Scottish National Party. It said:
The Scottish National Party is claiming in its latest literature
—I do not know whether this is up to date, or whether the SNP has produced a revised version since—
that Scotland has 'enough coal for 1,000 years' and 'enough oil to provide £1,800 million to a Scottish Treasury for 60 years' so why should we tolerate continuing social deprivation within Scotland?
If the SNP believes that Scotland has enough coal for a thousand years it should write to the Coal Board about it. There are proved coal reserves in the United Kingdom to last for 300 years, but nothing like that in Scotland. The oil may last 25 years. If we are serious about discussing energy policy in the United Kingdom, in the long term oil is infinitely less important than coal. If we had had a debate on United Kingdom energy policy rather than on the narrow bellyaching motion before us today, we would

have been able to put oil in its proper context. That would have been a much more profitable use of the time by the SNP.
The Times article continued:
What of the oil revenues? First, to talk of revenues from the North Sea fields over 60 years' is a foolish and misleading political trick.
It went on to talk not about Scottish oil, but about the United Kingdom sector.
There is no agreement in existence or remotely in prospect that says how the North Sea could be divided into Scottish and English sectors.
No attention has been paid to that. It is a myth to pretend that one can somehow easily decide in a cosy round table discussion with some English authorities how these apportionments can be made. That is unrealistic. The article continued:
All the trends are towards a breakdown of national barriers in the search for answers to these vital problems,
—the article there is referring to energy in general—
rather than a retreat into nationalism. For nationalism in this increasingly energy-hungry part of the twentieth century does not spell freedom, but the opposite. For Scotland to choose 'independence' on the strength of a present surplus of oil without safeguarding the future would be folly.
That is why I shall be voting against the motion tonight.
I believe that the Government must put greater pressure on the oil companies to ensure that we get a much greater take of the revenue and wealth that will accrue from the oil resources. But I do not believe that any other Government are capable of doing that. I have sufficient faith in my Government to believe that they will handle these problems correctly, fairly, and justly in the interests not only of the Scottish people but of the people of the United Kingdom.

Mr. Deputy Speaker (Sir Myer Galpern): Order. As far as I can judge there are still two hon. Members anxious to take part in the debate. The winding-up speeches are due to begin at 7.15 p.m. That leaves roughly 10 minutes apiece for each hon. Member, and I hope that I shall not have to pour oil on troubled waters later.

6.55 p.m.

Mrs. Margaret Bain: I shall bear your remarks in mind, Mr. Deputy Speaker.
It is extremely difficult for us of the SNP to reconcile the type of speech that we have heard from the hon. Member for Fife, Central (Mr. Hamilton) with the euphoric and premature post-mortems written about my party in the past few weeks. The rather predictable vitriol which came from the hon. Member indicated that the Scottish National Party is still a major political force in Scottish politics and will continue to be so and I shall not waste time by trying to pick up his rather spurious arguments.
I would rather turn to the theme which was put forward by my hon. Friend the Member for Dundee, East (Mr. Wilson) and the hon. Member for South Ayrshire (Mr. Siliars), who spoke of the need to break the spiral of decline and despair which exists in Scottish life. In endorsing some of the views of the hon. Member for South Ayrshire, I point out that of course there are ideological differences between his party and mine. There is a difference of emphasis on the means of reaching our particular end. But at least the hon. Member made an intellectually honest speech. He can see his way to supporting a measure which would help the young people of Scotland in particular and the whole economy in general.
I point to the European Scottish report of 1975 and to the conclusions of the steering committee. I ask Labour Members to bear this in mind when they go through the Lobbies this evening. For those involved with the survey the most significant and depressing outcome was the realisation that too much of the burden of the last 150 years of Scotland's history rests on the shoulders of young Scots today. It is not strange that they find it difficult to tolerate that, but it is disturbing that they react with a sense of hopelessness and despair.
The young Scots of today are tomorrow's future, and they need investment to change that future from one of despondency to one of hope. Against that background, I was horrified at the Minister of State's complacent and platitudinous attitude to my hon. Friend's remarks. There is a television programme called "Mastermind'. Today, every time a pertinent question was put to the Minister of State he gave a voluble "pass" and refused to answer the very important points about unemployment in

Scotland, which is a major problem for my country. It ill becomes the right hon. Gentleman, as a Member representing a constituency in the West of Scotland, where unemployment stands at 10·2 per cent., to show that kind of complacent attitude.
In addition, under this Government, in the past year emigration has risen from 4,500 to 9,500. It is the young people who are leaving our country. It is not enough for the Labour Government to say that this is due to some kind of world plot which is causing the recession.
Like the hon. Member for South Ayrshire, I see no question of selfishness or greed in trying to establish an oil-financed development fund for Scotland. Just as the Labour Government set their face against giving the proposed Scottish Assembly tax-raising powers, so they have no political will to establish the oil fund in Scotland, even though the Scottish TUC, with which the Government claim to have a special relationship, was one of the main organisations in Scottish society to ask for such a fund.
The Minister said that the Government rejected the concept of the fund because it would satisfy no one. In Dunbartonshire today we have heard of the proposed redundancies of 2,000 people in Clydebank. The oil development fund might well have met the needs of those 2,000 people, many of whom are my constituents, and for whom there is no alternative employment.
It is no compensation to those people for the Government to talk about regional assistance. Let me refer the House to the October 1974 Labour manifesto.
We have doubled the regional employment premium thus bringing another £40 million to Scotland every year.
What do we have now? We have the abolition of REP at an estimated cost of 20,000 jobs in Scotland. There is no long-term policy being operated by the present Government to guarantee a manufacturing base being continued in Scotland.
In areas such as Clydebank and throughout the whole of the West of Scotland, where we have industries such as Singers and shipbuilding, there is no long-term strategy to guarantee a future for them, thereby maintaining our manufacturing base, which is essential if the


Scottish economy is to pick up and guarantee the kind of security for which our people are looking.
Again, reference was made to the 65,000 oil jobs which have come to Scotland. No indication was given of how many of these are just temporary, building up an infrastructure, and how many of them will go in the next few months. Indeed, this is an element of hidden unemployment in Scotland. But the Minister thought that it was great that the Offshore Supplies Office was doing so much for Scotland.
I should like to point out an example from my constituency, where a company involved in the oil industry in Scotland was having extreme difficulty with a nationalised industry under British government. This American company, in Cumbernauld New Town, is the producer of pipeline valve actuators for the world's pipelines and offshore platforms. It is a considerable provider of employment in my constituency. It is probably the second largest manufacturer already, in its product line, in Europe.
The company was informed in April of this year through the contractors in London that it was not being considered for orders for the British Petroleum Sullom Voe project. A bid had been accepted from the company, and although it was commercially acceptable and technically acceptable to the contractors, BP did not have the manpower to visit our factory in Cumbernauld and inspect it. Orders were then to be placed with an American company in Houston, which has supplied BP in the past.
The company in my constituency could meet delivery requirements, and the bid had been with the contractors for over one year. Eventually, that problem was sorted out, but one full year was wasted, with all the implications of insecurity for at least 80 employees in my constituency. A nationalised industry such as BP, along with the OSO, could do nothing really to help in that kind of situation.
The hon. Member for Hamilton (Mr. Robertson) and, indeed, the hon. Member for Ross and Cromarty (Mr. Gray) who has now departed from the Chamber—spoke of promises made by the SNP to the electorate of Scotland. We

have been an intellectually honest party, putting to the Scottish people the kind of alternatives that are open to them. Because of our intellectual honesty, we have moved, in 10 years, to gaining one-third of the support of the Scottish people. I put it to hon. Members, such as the hon. Member for Hamilton, that that support will continue to grow. I ask him and his colleagues on the Labour Benches to look at their own promises to the Scottish electorate. I ask them to reconcile their vote tonight with the position in which many people in Scotland find themselves.
The October 1974 Labour manifesto for Scotland stated that
The first and overriding priority facing Scotland will be to create more and better jobs.
Unemployment rose to nearly 200,000 and, indeed, there is hidden unemployment.
It also said:
7,000 Civil Service jobs are being moved from London to Scotland.
We are still waiting. Then:
The whole of Scotland has development area status.
Of course, this has been withdrawn from certain areas of Scotland. We all know that only too well.
Then:
We have ended the delay and dithering Hunterston and laid down a policy involving a start for BSC and sites for oil platform construction.
The action has been that the plans for the expansion of the site have been shelved and no orders ever came for platform construction.
Then:
Labour's housing philosophy is simple and direct. Everybody is entitled to a decent home at a price they can afford, whether that home is rented or bought.
One hundred and sixty thousand houses in Scotland are below minimum tolerable standards, with no inside toilet. A quarter of a million houses in Scotland lack exclusive use of the three basic amenities.
So this whole sorry record goes on. Yet Labour Members can see their way to going through the Lobby tonight to oppose the concept of setting up an oil-financed development fund which could


help to eradicate many of these problems in Scotland.
The complacency shown on the Labour Benches today is equalled only by the hypocrisy that has come from the Conservative Benches. I was interested to read in the Evening Times the other evening that the hon. Member for Glasgow, Cathcart (Mr. Taylor) would today ask a Question of the Secretary of State for Industry about the future of the Scottish shipbuilding industry. I was particularly intrigued by this, knowing that the Conservative Party, including the hon. Member, had voted against the Intervention Fund and against the Polish contract coming to the Upper Clyde—a contract which has guaranteed jobs for many people in the West of Scotland.
Perhaps, of course, it is not so much that they are complacent today but that their friends and colleagues are all at Ascot and are not interested in the future of the people of Scotland.
Anyone who goes through the Lobbies tonight against this motion, especially any Scottish Member of Parliament, is rejecting the cries for help that are coming from the people of Scotland, who are asking for a change of attitude and for a genuine commitment that will set them free from the kind of problems that they have suffered over the last century. We shall build a new kind of future in Scotland using the resources of Scotland in futuristic and forward-looking industries, giving jobs to people and eradicating social problems.

7.5 p.m.

Mr. Alick Buchanan-Smith: About the only thing that the Scottish National Party has been able to achieve in this debate, in both the motion and the speeches that have been made, is to show that SNP Members are expert in one thing only—bleating about the ills of Scotland. If only they would realise that in that respect they themselves, perhaps, do one of the greatest disservices to Scotland. Every time they speak, and in motions such as that before us, all that they are doing is selling Scotland short. That is something that we do not want to see.
We want to see Scotland prosper and progress in the world, and not be con-

tinually cried down by the kind of speeches that we have heard from the SNP Bench this afternoon.
The one thing that is fortunate is that at least recent elections in Scotland have shown that fewer and fewer people are being deceived by what the SNP says. In itself, that is no wonder, because the greatest disservice that could be done to Scotland is that for which the SNP stands—to separate the Scottish economy from the economy of the rest of the United Kingdom. If there is one thing that would be certain to lead to unemployment in Scotland, that is the most certain thing of all. In regard to jobs, that is the one thing that none of us wants to see.
One of the unfortunate things that come out of a debate such as this is that we have got into the situation of trying to apportion blame in terms of the way in which policy has gone wrong on the exploitation of oil.
I share the view of my hon. Friend the Member for Aberdeen, South (Mr. Sproat). I say that coming from an area in which oil development is taking place. There is no doubt that over the past year or so much of the momentum has gone out of the oil industry. I do not agree wholly with what my hon. Friend said, that it is necessarily related to fiscal policy, because I believe that it is necessary that the country gets financial benefit out of the oil industry and takes its share in the profits that are in that industry. But where I believe the Government have gone wrong—this is where I disagree with the hon. Members for Fife, Central (Mr. Hamilton) and South Ayrshire (Mr. Sillars)—is in the form of Socialist policy that has been followed by the Government. There is no doubt that in relation to the kind of interference in the oil industry, particularly in the structure of the industry, and the establishment of the BNOC, the Government, by their policies, have put instability and uncertainty into the industry. It is that instability and uncertainty which have caused a slowing down in the industry.
I remind the Minister that there is nothing that needed to be done to safeguard the national interest that required the establishment of an organisation such as the BNOC. There is nothing that needed to be done in the national


interest that could not be done either by fiscal means or by licensing controls, physical controls, in relation to exploitation. By using up all this additional manpower, by instilling this degree of uncertainty and instability into the industry, the Government, must bear their share of blame for the uncertainty in the industry in recent years.
On an evening such as this, when debating oil. I cannot but reflect on the interference by the Government also in the oil platform building yards. At the time, we debated the subject in the House. But one thing that is significant is the amount of public money which had to be invested in that subject and which has shown no return whatsoever. If that had been left to private industry to do, it would have been private shareholders rather than the taxpayers who would have had to bear the loss arising from the very big mistake that the Government have made.
The Government must acknowledge that in modern times the oil industry is the best example of private enterprise and risk-taking. If this had been much more a partnership between the Government and private enterprise and there had been no unnecessary interference by the Government, the national interest would have gained much more. The correct partnership is for the companies to bear the risks and for the Government to take a supporting role in providing the infrastructure. By means of fiscal policy and licensing controls, they could then ensure a return for the nation. The Government have got the emphasis wrong.
I was interested in the speech of the right hon. Member for Orkney and Shetland (Mr. Grimond). The Government should take a supporting role—they have to some extent—in oil development. The industry has brought great benefits, but also great costs to the areas where development has taken place. Many of those affected, particularly where the environment has been destroyed, have gained no direct benefit. Existing industries have suffered the burdens of competition. The roads have been congested. One has only to travel the A92 or the A94 from Perth to Aberdeen to realise the burden that the industry has imposed on the normal road user.
When there has been so much benefit to the economy and to Scotland as a whole, has sufficient been done to invest in the areas concerned? I have three specific examples.
First, there has been controversy over which road—the A92 or the A94—should be trunked to join central Scotland to the Aberdeen area. I do not want to open this question again, but the Government have not given sufficient priority to proper communications between the oil areas and the rest of Scotland. They are detrunking one road in a year's time against the advice of the reporter of the public inquiry who suggested that it should be delayed for another three years, when £10 million of identifiable necessary improvements is outstanding on that road. In this detrunking, the Government are giving a vague assurance in relation to the Montrose relief road, which I welcome. They say that when the work is carried out, they may—I emphasise "may"—be able to support it from oil-related funds. The Government are not putting back enough into the economy of the affected areas and therefore are not supporting the industry properly.
My second point relates to the proper provision of facilities in the North-East and in Shetland. There has been a tremendous increase in population and housing in those areas but there has been no equal increase in community facilities like schools and community centres. There has been a huge housing development in the village of Porthlethen, on the outskirts of Aberdeen, in my constituency, but at this stage it has only one primary school with temporary classrooms and it is grossly overcrowded, with no facilities for community activities.
Thirdly, I am concerned about what is being done for industries other than oil. The Minster of State visited my constituency a year ago and promised—a promise for which I am grateful—an advance factory and an industrial estate for the town of Brechin. A year later, nothing has happened and the farmer has sown another crop in the field that was to be the site of the estate. People are concerned about the Government's intentions to help these areas. The demotion of the Aberdeen travel-to-work area from full development area status is a further example of insufficient attention being given to the need to support the


industries on which the economy of these areas will depend after oil ceases to flow.
The Government must do more. More money should be ploughed back into the areas which are making this great contribution to the strength of Scotland and to the British economy.

7.16 p.m.

Mr. Douglas Henderson: One thing which always emerges from a debate initiated by the Scottish National Party is the unanimity that crosses the frontier between the Conservative and Labour Parties. As I listened to the hon. Member for Aberdeen, South (Mr. Sproat) congratulating the hon. Member for Hamilton (Mr. Robertson), who seems again mysteriously to have disappeared, I wondered whether he would have welcomed with such enthusiasm a similar result in his own constituency.
Again and again, we hear from both main parties a unanimity of opinion, of approach and of complacency, which emerges only when the SNP initiates a debate. This debate shows the division between those of us who believe that Scotland's resources are the property and the right of the people of Scotland and those in the other parties who believe that they should be controlled from London.
That is what this debate is about: whether Scotland's resources and problems should be handled in Scotland or London. In the speeches of hon. Members from other parties—perhaps with the honourable exception of the hon. Member for South Ayrshire (Mr. Sillars)—one heard an incredible complacency. The theme seemed to be: "Everything is working perfectly with control in London. Why do these nasty SNP people want to change it?"
I am reminded of that satirical poem of Hugh MacDiarmid, in which he says:
Tell me the auld, auld story
O' hoo the Union brocht
Puir Scotland into being
As a country worth a thocht.
England, frae whom a' blessings flow,
Whit would we dae withoot ye?
Then dinnae threap it doon oor thnoats
As gin we e'e could doot yeo!
I am sure that that will be appreciated. I hope that all our colleagues from other Scottish constituencies understood it. The

test would be to ask them to give us the second verse. Perhaps the Minister of State would oblige.
There is a polarisation in Scottish society between those who believe fundamentally that the resources and the problems of Scotland can be tackled only by Scottish people responsible to the Scottish electorate and with a wider sense of the world than we get in the United Kingdom, and those on the other side—I accept that it is a legitimate and fair view—who believe that Scotland's resources are better managed from London, that Scotland's problems are better solved in London, and that Scotland's future can be decided only in London.
After the constructive and incisive speech of my hon. Friend the Member for Dundee, East (Mr. Wilson), we had the Government's script read by the Minister of State, the right hon. Member for Rutherglen (Mr. MacKenzie). He should get a new script writer. I could not believe that any Member of Parliament—and especially a Scottish Member—could sound so boring, so complacent and so platitudinous as the right hon. Gentleman contrived to be. I acquit him, of course, of such characteristics. The guilty men are in the Official Box, and I hope that when the Minister next has to make a speech we shall have a change of faces. No doubt it is too much to expect a change of attitudes.
The Minister spoke of the people of Scotland getting a fair share of the revenues, and he talked about infrastructure. The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), among others, drew attention to the problems of infrastructure. Over the past few years the Government have given special assistance in this direction, but it is significant that in the past two years the grant for special oil-related expenditure has been cut for the Grampian Region, for the Banff and Buchan district, for the Gordon district and also, I believe, for the Kincardine and Deeside district. So the ratepayers in these areas, which are bearing the brunt of the developments, are receiving less and less grant from the central Government to help them.
At bottom, as was rightly stressed by several hon. Members, speaking from different points of view, this is a problem of Scotland's industrial structure and its unemployment. Those of us who have


seen unemployment in our own constituencies or, perhaps, in our own families at times—that can happen to hon. Members in any part of the House—realise how destructive it is of the morale of individuals and, what is worse, of the morale of entire areas.
I can always remember the time when I brought visitors from a business college in London—this was before I came to the House—and took them round parts of Glasgow to look at the possibilities for development. What struck them more than anything else was the expressions on the faces of people standing at the street corners. I am sorry if the hon. Member for Aberdeen. South thinks that this is a laughing matter.

Mr. Sproat: I am laughing at you, Douglas. That is all.

Mr. Henderson: It is extremely serious, and does not call for frivolity of that kind.
The morale of many people in Scotland has been destroyed over a long time. Sometimes entire families have had the experience of seeing people without employment for two and even three generations. I am sorry to say that the situation has got worse.

Mr. Alexander Fletcher: Absolute rubbish.

Mr. Henderson: The cry of "Rubbish" goes out from the Tory Party Front Bench. After all, there is probably not much unemployment in their areas. But anyone who knows central Scotland knows that that state of affairs is all too prevalent. It is a blot and a shame on all of us who represent Scottish constituencies and on all of us who purport to speak for Scotland.
How is it that the resources of Scotland can be so mismanaged? How can we be so disorganised as a nation that we have not been able to tackle these problems fundamentally and in a lasting way over such a long time? The glib cry goes out—we heard it from the hon. Member for Fife, Central (Mr. Hamilton)—about international crises and the rest. Incidentally, I remember the assurance that the hon. Member for Fife, Central gave the House some time ago, that he intends, when Scotland becomes independent, to leave the country at once. In my view, that is a great incentive to all

of us on the SNP Bench to make sure that that independence comes quickly.
Here we have an opportunity. I remember an American visitor saying to me in 1970 "If I were ever asked what it was that could make a difference to any modern industrial country, I would say that it was the discovery of oil." Yet hon. Members have been telling us that we should almost be better off without it, that they are doing the Scots a favour by taking the revenues away down to London. "Look at all the headaches we save you by doing that", they say.

Mr. Sproat: Silly man.

Mr. Henderson: I can understand the rage and fury of the Conservative Front Bench—

Mr. George Robertson: rose—

Mr. Henderson: No, I shall not give way. I have only a few minutes. I can understand the rage and fury of the Conservative Front Bench in the light of their record.

Mr. Fletcher: The SNP Leader should fire him.

Mr. Henderson: I think that the hon. Member for Edinburgh, North (Mr. Fletcher) has been using that phrase constantly during the past 10 minutes, and I am afraid that that is about all he has in his head. He has nothing else to contribute to the deabte on oil or on any other subject.
The attitude has been that Scotland can be saved from all its problems by London's taking control of Scotland's oil resources, so that the wise and benevolent men down here will spend it for Scotland, and spend it wisely, because, of course, the Scots would be thriftless and make a hash of it. That is the underlying argument running through the debate today.
Are the Scottish people as capable of coping with their problems as are any other people in the world?

Mr. Gray: It is quite plain that the hon. Gentleman is not.

Mr. Henderson: As I look at the Tory Front Bench, I can understand that there would be doubts about the answer to that question. We have no doubt what could be done for the Scottish people.


This place has had years and years in which to tackle the fundamental problems in Scottish society, and it has totally failed. Not over the four years of this Government, not over the past 10 or 15 years but for generations, this place has failed the people of Scotland.
Because this place has failed the people of Scotland, they are looking to new remedies and new ways of deciding matters for themselves. Basically, that is what the argument is about—whether the Scottish people should control things for themselves and should make their own decisions, or whether it is better to leave London to do it for them. That is the great divide between us. [Interruption.] I have no doubt that the hon. Member for Edinburgh, North has been out for a good dinner or something and has enjoyed another three minutes to hear the Minister.
We have witnessed the attitude of the two Unionist parties. It should not be forgotten that the Labour Party is as much entitled to be called the Unionist party as are the Conservatives in this context. They join hands and decide that the Scottish people are not to have the right to determine their own affairs.
In Scotland, we have a record of social deprivation, of unemployment, of rotten housing, and many other things which need to put right in our society. When the oil was discovered, people in all parties in Scotland must have said that here was something which gave us the possibility of a fresh start. But the conclusions reached are different. The Labour Party has reached its conclusion. It regards the possibility of any such fresh start for the Scottish people as immoral, contrary to the findings of the Church of Scotland. I do not know what the Moderator will say to the Minister of State—the right hon. Member for Rutherglen. Labour regards it as immoral that the Scottish people should have this resource. The Conservatives want to hand everything to the international oil companies. That is their policy. They would he happy with that.
We, on the other hand, have said that the right approach is for the Scottish people to have control of these revenues through an oil fund which would be used to deal with unemployment, with social

dereliction, and with the other problems in Scottish society—dealing with them within Scotland, in a Scottish context, through a Scottish Government elected by the Scottish people.
When the vote comes tonight, hon. Members will be voting for or against Scotland, for or against Scotland's rights, for or against Scotland's oil, and for or against Scotland's future.

7.30 p.m.

The Minister of State, Department of Energy (Dr. J. Dickson Mabon): May I first respond to the hon. Member for Aberdeen, South (Mr. Sproat) and his hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) who raised the question of progress in the North Sea? I know that the hon. Member for Glasgow, Cathcart (Mr. Taylor) is anxious that I should tell him about platform orders and say how encouraging the present position is. The hon. Member must recall that we had the third platform at Ninian, Ninian North, in the period that he mentioned. Since then we have had this regrettable hiatus which has been a problem for the yards. We have now begun to recover and I was able to announce, after the Oil Liaison Committee met last week, that there was confidence that there would be further orders in the next 18 months.
I can be specific about the development plans of the companies and their intentions.
The fields we expect to see developed in the next two years or so are Fulmar, Cormorant North, Buchan Magnus, N.W. Hutton and Maureen. Hon. Members have spoken about the platforms and the fields that are still being developed. If we were to take the point of the hon. Member for Dundee, East (Mr. Wilson) and keep things as they are, what assurance is there that we would not end up producing more? If we go into the 1980s at the present rate we shall be producing a surplus of oil considerably in excess of what we need for self-sufficiency in the United Kingdom, namely 100 million tonnes.
We shall have to look at the question of depletion. We have to talk to the companies about this. It is certainly something that we take seriously. We cannot take the view—I do not want to caricature hon. Gentlemen—that we should let things rip and develop the


fields as fast as we can, getting out perhaps 200 million tonnes of oil. We would then be in a sad state in the 1990s and next century. We must husband our resources.
It is difficult to run a depletion policy. I do not accept the criticisms that the programme has slowed down because of BNOC. Even the Conservatives would have had to invent BNOC or use BP to find out lots of things which the companies would not have found out for us. I am talking in terms of depletion. We would like BNOC to find areas of oil for us which we would then keep as reserves. I believe that to be a good policy. Why should we ask a commercial company to do that? It would want a licence to develop the fields. There are good arguments for BNOC, quite apart from the Socialist arguments, which are also good arguments—

Mr. Sproat: Good arguments and Socialist arguments. There is a difference!

Dr. Mabon: No.
I accept the point about the smaller fields. We do not want to neglect the marginal fields. They are part of our resources. No one has come forward and made a case for the various tax concessions and reservations that we have. These are in the fundamental Act of 1975. We are perfectly willing to look afresh at this issue. I take the point about the current fiscal regime and the point made by the hon. Member for Dundee, East about whether the taxation policy is the wisest that we could adopt.
I readily admit that all of this is worthy of review.
I do not chastise the hon. Member for Ross and Cromarty (Mr. Gray) too much for his remarks. I am sorry that he made them because in our estimation it is wrong to write off Portavadie and Hunterston.

Mr. Gray: Why?

Dr. Mabon: I am not prepared to argue now whether it was a mistake to create Portavadie and Hunterston. The fact is that there was little resistance to our creating them. I have some news which I believe hon. Members will find pleasantly surprising. There are at least four companies expressing interest in these developments. One of these com-

panies—Howard Doris—has announced its interest in conjunction with a Dutch firm.
The companies are interested in the four existing concrete sites in Scotland and in going forward with various sophisticated developments which involve concrete. The Government would be foolish to say to these companies "We are not bothered. We are tired of carrying on along this road. We shall shut down the yards." It is conceivable that the orders we would get would come to these yards and not to others. I need not go into the technical reasons. Those in the oil business know what I mean.

Mr. Gray: Will the right hon. Gentleman confirm that it is not the Govern-merit's intention to direct anyone to those two yards to the detriment of other yards which are surviving very well by their own efforts?

Dr. Mahon: I can truthfully say that that is not the case. There is one firm that is most anxious about Portavadie. The hon. Gentleman knows about that. That firm is in negotiation with us now. The other two firms have their own designs and ambitions. They are not necessarily in conflict with one another except inasmuch as the oil company concerned may choose one system rather than another, which would mean that the order would go to one yard rather than another. We shall not interfere. We are not a Government who decide technical matters. It is for those who are experts to decide and choose. We have our technical advisers but we do not dictate where the orders should go.
I mention this to show that we are making progress despite the fact that the oil companies—working on the frontiers of a new technology—have had their setbacks. I do not accept that this has anything to do with the bureaucracy of a Socialist Government, just as I would not say that it was because of free enterprise. Such suggestions are nonsense. The oil companies, BP, Shell and the rest, and BNOC, have done exceptionally well.
We have to take seriously the SNP view on depletion. The SNP has not thought through its policy, just as it had not thought matters through when it voted with the Conservatives to bring down the Government. It was doing that in defiance


of its own National Council which had resolved that it wanted to have the devolution Bill on the statute book. Perhaps it was not so much defiance as confusion. What a confused bunch they are.
Let me take the most confused of the lot, the hon. Member for Dundee, East. In 1974 the SNP—the hon. Gentleman was one of its advisers—told us that depletion control must begin at a production rate of between 40 million to 50 million tonnes a year. The hon. Gentleman changed his mind, and I do not blame him for that. Later he said that it was envisaged that the figure would be 50 million to 80 million tonnes a year. That was still in 1974.
In 1976 the hon. Gentleman declared, on behalf of the SNP, that the production rate at which depletion control would start was in the range between 30 million to 40 million tonnes a year. The hon. Gentleman's figures are going up and down. In January 1977 he said:
Once the development expenditure has been incurred the economic costs involved in restraining production levels by more than 10 per cent. to 15 per cent. are high and should not normally be complated by the Government of Scotland.
The hon. Gentleman's figure was 50 million tonnes. We are bouncing around.
There is one more statement which gives the latest news from the front. The latest news is that the level we are to accept, as enunciated by the egghead in charge of the Scottish National Party's policy—the "honourable egghead"—is 60 million to 90 million tonnes a year. I want to take that as the latest information and to ask what it means in terms of these platforms that I have mentioned. It would mean that we did not build any of them. It would mean that we had probably made a mistake in authorising Ninian North, Murchison and Tartan. Shades of Kirkcaldy and Methil!
The fact is that we are at 38 million tonnes. Despite the criticism of progress, we shall get to 50 million or 60 million tonnes—and here we get to the bottom of the hon. Gentleman's depletion range. Therefore, if the SNP is wise, if we accept its opinion and the people of Scotland accept it, it will be 15 years, on present calculations, before the next platform is

ordered and built. We all know that that is applicable only to Scotland because Laing's, the only steel yard in England, has now shut down. There are no concrete yards in England. This is a specifically Scottish industry which, by decision of the SNP, would not have an order for 15 years. Lewis Offshore would not get another order of any kind for 15 years. Not another module builder in Scotland would get an order for 15 years.
Yet, as my hon. Friend the Member for Fife, Central (Mr. Hamilton) said, this is one of the largest, indeed, the largest, of our industries. It is bigger than agriculture and mining. The SNP may sneer at 55,000 or 60,000 jobs, but according to its plans this industry, one of our largest, most profitable, and finest, would have to shut down for 15 years.

Mr. Gordon Wilson: I am grateful to the Minister for having given up that exaggerated repetition. The right hon. Gentleman will admit, if he is an honest man, that he has quoted me out of context. The situation about development and depletion policy is as follows. Starting from scratch, 50 million tonnes would be a reasonable figure to have in mind. But, of course, as the right hon. Gentleman is aware, as one produces oil, one has to deal with the situation where one has the developments under way, and in the statement, only part of which he quoted, he will be able to find that we shall have taken that into account. Secondly, I repudiate as a complete exaggeration the figure of 15 years. It is quite untrue. As he knows, with the high Scottish content of orders that we propose, there would be more jobs rather than fewer.

Dr. Mabon: Even if the hon. Gentleman could prove my calculations wrong—and I have taken good advice—and the figure was not 15 years but five, our offshore industry would be wiped out. Furthermore, when we come to the arguments about protectionism, does he realise that Ardersier is building a platform for Brazil? Does he realise that the opposite of protectionism is retaliation?
I will explain what we are trying to do. After the oil is gone, whenever that is going to be—it might be in this century or the beginning of the next—we in Scotlant want to be among the best of the


builders of offshore oil installations for the rest of the world. The irresponsibility of the SNP and its motion today is just the kind of thing that would do incredible damage to Scotland. I call on my right

Question accordingly negatived.

hon. and hon. Friends, and on all men of good will, to defeat the motion.

Question put:—

The House divided: Ayes 14, Noes 131.

Division No. 237]
AYES
[7.43 p.m.


Crawford, Douglas
Robertson, John (Paisley)
Wigley, Dafydd


Evans, Gwynlor (Carmarthen)
Sillars, James
Wilson, Gordon (Dundee E)


Ewing, Mrs Winifred (Moray)
Stewart, Rt Hon Donald



Henderson, Douglas
Thomas, Dafydd (Merioneth)
TELLERS FOR THE AYES:


MacCormick, Iain
Thompson, George
Mr. Andrew Welsh and


Reid, George
Watt, Hamish
Mrs. Margaret Bain.


NOES


Abse, Leo
Grocott, Bruce
Padley, Walter


Anderson, Donald
Hamilton, W. W. (Central Fife)
Palmer, Arthur


Archer, Rt Hon Peter
Harrison, Rt Hon Walter
Pardoe, John


Armstrong, Ernest
Hooley, Frank
Parker, John


Ashley, Jack
Horam, John
Pendry, Tom


Atkinson, Norman (H'gey, Tott'ham)
Huckfield, Les
Penhaligon, David


Bates, Alf
Hughes, Rt Hon C. (Anglesey)
Price, C. (Lewisham W)


Bonn, Rt Hon Anthony Wedgwood
Hughes, Roy (Newport)
Radice, Giles


Bidwell, Sydney
Hunter, Adam
Rees, Rt Hon Merlyn (Leeds S)


Bishop, Rt Hon Edward
Janner, Greville
Richardson, Miss Jo


Booth, Rt Hon Albert
Jay, Rt Hon Douglas
Robertson, George (Hamilton)


Bottomley, Rt Hon Arthur
Jeger, Mrs Lena
Robinson, Geoffrey


Bradley, Tom
Jones, Alec (Rhondda)
Roderick, Caerwyn


Bray, Dr Jeremy
Judd, Frank
Rowlands, Ted


Buchanan, Richard
Kaufman, Rt Hon Gerald
Sandelson, Neville


Campbell, Ian
Kinnock, Neil
Sever, John


Canavan, Dennis
Lambie, David
Shaw, Arnold (llford South)


Carmichael, Neil
Lamborn, Harry
Silkin, Rt Hon S. C. (Dulwich)


Carter-Jones, Lewis
Lamond, James
Smith, Rt. Hon. John (N Lanarkshire)


Cartwright, John
Latham, Arthur (Paddington)
Snape, Peter


Cocks, Rt Hon Michael (Bristol S)
Lee, John
Spearing Nigel


Coleman, Donald
Litterick, Tom
Spriggs, Leslie


Cox, Thomas (Tooting)
Loyden, Eddie
Stallard, A. W.


Cronin, John
Luard, Evan
Stewart, Rt Hon Donald


Crowther, Stan (Rotherham)
Mabon, Rt Hon Dr J. Dickson
Stoddart, David


Cryer, Bob
McDonald, Dr Oonagh
Strang, Gavin


Cunningham, Dr J. (Whiteh)
McElhone, Frank
Summerskill, Hon Dr Shirley


Davidson, Arthur
MacFarquhar, Roderick
Taylor, Mrs Ann (Bolton W)


Davies, Ifor (Gower)
MacKenzie, Rt Hon Gregor
Thomas, Jeffrey (Abertillery)


Davis, Clinton (Hackney C)
Maclennan, Robert
Thomas, Ron (Bristol NW)


Deakins, Eric
Madden, Max
Tomlinson, John


Dean, Joseph (Leeds West)
Mason, Rt Hon Roy
Walker, Harold (Doncaster)


Doig, Peter
Meacher, Michael
Walker, Terry (Kingswood)


Dormand, J. D.
Mellish, Rt Hon Robert
Ward, Michael


Dunnett, Jack
Milian, Rt Hon Bruce
Watkins, David


English, Michael
Miller, Dr M. S. (E Kilbride)
White, James (Pollok)


Evans, loan (Aberdare)
Molloy, William
Williams, Alan Lee (Hornch'ch)


Evans, John (Newton)
Morris, Rt Hon J. (Aberavon)
Williams, Sir Thomas (Warrington)


Fernyhough, Rt Hon E.
Moyle, Rt. Hon. Roland
Wilson, William (Coventry SE)


Foot, Rt Hon Michael
Newens, Stanley
Wise, Mrs Audrey


Fowler, Gerald (The Wrekin)
Ogden, Eric
Wrigglesworth, Alan


George, Bruce
O'Halloran, Michael



Gilbert, Rt Hon Dr John
Orme, Rt Hon Stanley
TELLERS FOR THE NOES:


Gould, Bryan
Ovenden, John
Mr. James Hamilton and


Graham, Ted
Owen, Rt Hon Dr David
Mr. James Tinn.

WALES (ECONOMIC SITUATION)

Motion made and Question proposed, That this House do now adjourn.—[Mr. Snape.]

7.55 p.m.

Mr. Dafydd Wigley: I am glad of the opportunity to raise a subject which has been a theme in previous debates on Welsh Days, in Welsh Grand Committees and, indeed, in debates on the economy in general over the past four years and longer. In opening the debate, my mind goes back to the very first week after the March 1974 General Election. On that occasion I remember that there was an opportunity to debate the economic problems facing Wales. The fact which at that time stared everyone in the face was the failure of successive Governments to bring forward a pattern of balanced economic development in Wales.
I remember speakers who had just joined the Government Benches understandably criticising the previous Conservative Administration for its failures in this direction, as well as the tragic economic developments of the last few weeks of 1973 and the first two months of 1974. At that time, hon. Members of all parties were looking forward to a way of working ourselves out of the economic mess into which we had got ourselves. In doing so, we wanted to ensure that it was not just a search for a boom which would bring benefits to the South-East of England and the Midlands. We also wanted a pattern which would ensure that Wales did not retain the same sort of economic blackspots that it had suffered in the 1920s and 1930s and, to a lesser extent, since the war. Examples of that pattern also, no doubt, existed in other parts of the United Kingdom. There were areas which had suffered because of the changing economic patterns over the last century, the rundown of major industries and the failure to ensure that in their place were developed balanced economic opportunities.
I initiate this debate not because the economy is an end in itself but because, unless we get the economic circumstances in Wales right, there is no prospect of ensuring the survival of our communities. The possible loss of communities—as we

have seen happen in the Heads of the Valleys in Glamorgan and Gwent and the old slate quarrying villages of Gwynedd—means that we also lose our culture, language and everything else which is dear to us. Therefore, the objective of obtaining balanced economic development in Wales is one which is a service to the community as a whole and not an end in itself. But unless we get that balance in development, we shall continue to see declining villages, schools being closed, young people leaving, an ageing population, an increase in the pressure on the social services which that leads to, and the decaying of the whole fabric of a community.
I am sure that hon. Members of all parties will accept as an objective the need to ensure that there is as reasonable an opportunity as possible for the maximum number of people to have adequate job opportunities, and a future within their own community. Since 1925, Wales has seen the collapse of the coal industry as the major employer. At that time, 225,000 people were employed in the Welsh coal industry. That figure is now about 35,000. In one generation that represents an astronomical decline.
A decline of similar proportions is now taking place in the steel industry. which is another major industry in Wales. As steel plants close, so again—as in the history of the coal industry—whole communities can be written off. We know the fear that has been experienced in places such as Ebbw Vale and Shotton because the people know that when these industries end there is a very great doubt about the ongoing viability of their communities.
It is not only in terms of manufacturing industry that we see these problems facing us. We see them also in the agricultural sector and the rundown that there has been in agricultural employment. As a species, the farm labourer has almost gone out of existence. The figures are minuscule compared with what they were only just after the war. With this, we have also seen the amalgamation of farms into large units and the purchase of farms by institutional investors and people from outside Wales, and even from outside Britain, which have themselves led to difficulties facing young people going into agriculture, leading to a position which has aggravated rural depopulation.
The industries which have grown in the wake of the decline of the old industries have been scattered and sporadic and they have not in themselves brought a full answer to our problems. Since the war we have seen successive Governments trying, by various policies—development areas, special areas and the rest of it—to induce growth from outside and to transfuse industrial activity from sectors outside Wales. In some areas this has succeeded to some extent, but I do not think that anyone will deny that it has been patchy.
We have seen some firms move into Wales and succeed. Perhaps I should declare my own past interest, having worked at one time for Hoover, at Merthyr Tydfil. When I was there, the company employed about 5,000 people. Now, in an expansion plan, it is hoped to increase that to 7,500. That is one of the instances of a major modern manufacturing concern coming into Wales and succeeding. But many of the branch factories which have come into Wales have come merely in order to get the grants available to them and, sadly, we all know of examples of those which, after a few years, have packed up and left.
A characteristic of those which have succeeded and stayed—I include amongst them even the largest, the Hoovers of this world—is that, being branch factories and manufacturing plants, they cannot give a balance of employment opportunities. They have not succeeded in ensuring that jobs are available for management staff, office staff and technical staff at the Welsh level. Very often these jobs are at head office level and outside Wales, so that the job opportunities in many of the Welsh plants have been stilted and geared towards factory floor employment and very often without as great a proportion of the technical and commercial opportunities that would arise in the company as a whole throughout the United Kingdom.
Where we have succeeded in getting development, we have not always had the right development. But, sadly, there are many more areas which have not had any development. I think of my own constituency and the failure that there has been to fill the empty advance factories standing there. We accept that advance factories are useful in themselves. They make it easier to attract develop-

ments when the economy is improving. But advance factories standing empty for a long period can become a depressant upon a community. People start to think—especially people from outside—"Why is it that these factories are standing empty with no one coming in?" So far, we have failed to get a structure of policy which has led to the filling of these factories as well as the construction of them.
There are reasons for this, and we have laboured those reasons in the past, but it is right to underline them again. The development of the infrastructure is fundamental. The M4 in Glamorgan has been developed, and we have seen in the case of the Ford project at Bridgend how the infrastructure in terms of road and rail communications can play a vital part in locating a major plant. Unfortunately, in many other parts of Wales—this is true of the counties of Gwynedd, Clwyd and in Mid-Wales—we have not had this type of modern road network which is so essential for manufacturing industry. I know of companies which have thought of setting up in my own constituency but which have felt that the communications have not been adequate.
It is not only road communications which are important, and at a time when we have 90,000 people out of work one would have thought that there was a good case for pressing ahead even faster with the development of road communications —I think of the A55 and the A5 in North Wales. Increasingly important is air communications. Only this week, I had a letter from an electronics company in America interested in the possibility of developing in Gwynedd, having links with the University College of Bangor which had led the company to consider Gwynedd as a location. But one of the prime considerations was the availability of air connections with Gwynedd.
As we know, although there has been a welcome development of an air link from Hawarden down to Cardiff airport in the last few months, with connections through to international flights from Brussels, there has not been any development of air links through to the more westerly parts of Wales. We would do well to look at locations such as Valley, in Anglesey, Llandwrog, in my own constituency, Llanbedr in Merioneth, down in Pembroke and in Swansea, as possibilities for an integrated air service which


could link through to Cardiff and to Brussels for international flights. That is an important consideration in the development of industry.
The other sector of industry that we have seen developing at a very fast rate in the past two decades in my part of Wales, in Gwynedd and in Dyfed, has been the tourist industry. However, that industry is perhaps an example which underlines the imbalance in our economy and the need for engendering balanced economic development. For climatic reasons, unfortunately, the season in Wales is relatively short—two or three months. We have a period between the middle or end of May and the first week in September when all the tourist sector has to make the money which will keep it going for the rest of the year. We have an economy working at 200 per cent. capacity for a few weeks in the summer and at 10 per cent. capacity for the rest of the year. This is a classic definition of a state of dis-economy. We have an industry, with all the investment that it entails, working for a short period in excess of its capacity but for most of the time way down below capacity.
In the tourist industry itself we have seen some developments at the least beneficial end of the industry which have soaked up and saturated the tourist market in Wales and yet have not brought as great a return as one would have hoped. The hope always is to see the maximisation of the type of tourism which brings the most revenue that will stay in Wales. Perhaps the day trippers are the sector which brings in least in this way. We have heard of the people who fill their car with petrol and bring their sandwiches with them leave their litter and drive home having spent virtually nothing.
In looking at the development of tourism as one of the inputs into the economy, we must consider not only the extension of the season but the balance between various parts of the tourist sector, not least the international sector.
Tied in with all this, looking especially at the replacement of jobs and the need for manufacturing industry, we must face the reality that there are many fewer footloose supranational companies now than there were 10 years ago. The pattern has changed. I cannot help feeling that we

must look in the future to the possibility of putting more emphasis on encouraging young people who have the talent and who have the ideas to develop those ideas themselves in their localities. This means not only having the right incentives and the right assistance available to them through the agencies that we have, but also engendering the right approach, especially in our education sector.
We want to make sure that we do not develop the brightest of our people to a state where they leave college or university, perhaps at the age of 21, feeling that they must go into a secure job and to be reluctant to take a risk. These are the people who can be planting the acorns which will grow into the big trees of employment in the future.
That has not happened sufficiently in Wales in the past, for a number of reasons. One is security of employment, which is totally understandable, given the Welsh background. Another is the experience that these people have in their own areas, and of course we have not had the background and experience in industry in the way that we might have had in an area such as Birmingham. We need a new emphasis in this direction to give young people the motivation to go out and start enterprises for themselves. If they succeed, the companies which they found will grow, will develop job opportunities, and will, optimistically, persist in the future and not be the type which close down at the first ill wind of economic recession.
Finally, I draw attention to the role of the various agencies in this question of getting a balanced economic growth in Wales—particularly the Welsh Development Agency and the Development Board for Rural Wales. These two bodies were set up with the very ambitious objectives of cracking the problems that we face. To some extent they have made a good start. In the more limited time that it has been in existence the rural board has achieved more than the WDA.
We are worried that the Welsh Development Agency and the rural board are to some extent working in a vacuum. I do not apologise for underlining once again that unless these agencies have guidelines in terms of quantifiable objectives and a strategy for reaching those objectives, geographically and sectorally


determined, we will not get the maximum benefits that we could out of these agencies. In a nutshell, we need an economic plan for Wales.
More and more bodies have been pressing for this. The Council of the Principality, the report on "Overseas Investment in Wales", and a number of influential individuals have also pressed for such a plan. Some of these individuals have not previously accepted the case for the plan, but in the last six months they have admitted that the case for it is now unanswerable.
Unless we do get this movement, we shall continue to have the imbalance of the past. In the dying days of this Parliament—perhaps this is the last debate we shall have on economic development in Wales—I hope that we shall see the end of argument against a background of rejecting this type of economic approach. I hope that in the new winds of a new Parliament at least we shall have an opportunity of moving forward with a new approach.

Mr. D. E. Thomas: Before my hon. Friend leaves this salient point will he comment on the fact that county councils in Wales now undertake far more economic planning and long-term projections of job needs than the Welsh Office? Does he agree that in the structure plans of each county there are projections based on population and current job opportunities, and projections for job shortfall? There are no national projections. Will my hon. Friend urge the Minister to tell us, when he replies to the debate, whether it is now the intention of the Welsh Office to use the data in the structure plans to produce at least a job shortfall calculation for Wales as a whole?

Mr. Wigley: I am grateful to my hon. Friend for bringing in that point. Although we have seen development plans for every part of Wales, with quantified figures—some more questionable than others—of the number of jobs needed in each area, it strikes us devastatingly that one cannot have county development plans in isolation. For example, take the comparison between Gwynedd and Clwyd. It is true that there is an interface between these two counties. The same thing must he true of the interface between

Mid-Glamorgan, South Glamorgan and perhaps even West Glamorgan. The roads cross the county borders and there is a mutual travel-to-work area. To take these countries in isolation is not good enough. They are woven together. Therefore there must be an overall package—an all-Wales development plan.
I can see the Secretary of State smiling and I have no doubt that he is thinking that an all-Wales development plan has interfaces outside Wales as a whole. Of course it does. In the present context of United Kingdom economic development, and within the economic development of the EEC, we must consider how to divert more towards the infrastructure in Wales.
Unless we have it right at the Welsh level we shall lose the opportunities of the agencies that have been set up in Wales. Therefore, if it is not already in the manifesto of the Labour Party for the next election, I suggest that the Government should consider writing in an economic plan for Wales now. This could be one of the best bits of good news that we have had for a long time for overcoming the problem of unbalanced development in the economy of Wales.

8.15 p.m.

Mr. Donald Anderson: The hon. Member for Caernarvon (Mr. Wigley) has opened this debate in a lucid and relatively non-controversial way. However, I must admit that I am still rather confused about his concept of balance in the Welsh economy. We clearly cannot see Wales as a self-contained entity and look at the balance between North Wales and South Wales, for example. Certainly one can see an interface between mid-Glamorgan and West Glamorgan, but for the life of me I cannot see such an interface between the structure plans of Clwyd and West Glamorgan.
The hon. Member conceded that in the United Kingdom context there must be a considerable degree of interdependence, as has been heavily underlined by the recent Ireson and Tomkins study of input and output relativities between Wales and the rest of the United Kingdom. If, for example, we are thinking of a balance between the manufacturing sector and the service sector in Wales, what sort of criteria do we employ to decide on the model that we have in


mind? This is the sort of difficulty involved in talking of a balance within the Welsh context.
There are, of course, many negative elements which the Government will be ready to concede, particularly in unemployment. But there are also a number of positive elements which I hope to stress.
During the last 15 years we have seen what a number of economic commentators have described as a second industrial devolution in Wales. There have ben a series of major revolutions in the coal industry, in our farm structure and in transport. Now we are in the middle of a revolution in metal manufacturing, particularly in the steel industry. The restructuring of Ebbw Vale and East Moors —decisions where the Secretary of State took a personal lead in mobilising the total resources of Government to meet the major problems of these twin areas—is an example of this.
In 1950 more than 50 per cent. of our industrial employment was in the coal and steel sectors. Now more than two-thirds of our industrial employment is in sectors other than coal and steel. The losses in coal and steel account for almost all the job losses in Wales. Yet since 1965, it is fair to say, the rate of decline of industrial employment has been lower in Wales.
Obviously we need new investment, but we need it at a most difficult time. If we ask where the new investment will come from we are told that there is no footloose private industry, particularly that which is labour intensive. A Ford investment comes once in a generation, and we have had that in Wales. There are no additional major plans for decentralisation of Government Departments in Wales. We face a time of increase in the labour supply, partly because there are more women in the labour market and partly because of the increase in the number of school leavers.
We might argue that the very success of the Government's regional policy in Wales in the past decade has led to the new concentration on inner-city problems elsewhere. If one goes to Battersea, for example, one sees a hole where the Morganite factory was which has since moved to my constituency. Part of the imbalance in the employment structure of Birmingham and London has been caused by the

relative success of our regional policies in the past.
There has been a considerable amount of diversification leading to a healthier balance within Welsh industry, and all the objective commentators accept that the Welsh economy is being adjusted in the right direction—towards the formation of an increasingly modern, diverse and resilient manufacturing base.
Many of the greatest technological changes have come about relatively recently. One thinks of the aluminium investment at Anglesey, by BP at Baglan Bay, as well as the Amoco investment at Milford Haven. As an example of the change in the Welsh economy, I would point to the fact that whereas 120,000 men were employed in the mining industry just after the war, now 30,000 men are employed in NCB mines in Wales and today more people are employed in manufacturing firms in Wales with links with the United States than are employed in coal mining. What gives confidence for the future is the fact that 50,000 people are now employed by more than 500 firms which have moved new capacity into Wales or completed new operations since 1966. Since 1974 under the Labour Government over 140 manufacturing plants have opened in Wales, employing 8,500 people.
I turn to consider the question of balance and the position as it affects small industry in Wales. I accept the psychological incubus to which the hon. Member for Caernarvon drew attention in our search for security at all costs and the relative lack of development of local entrepreneurial skills. I hope that he hon. Gentleman will accept the new climate of encouragement of small industries under the Labour Government, particularly the new boost given in the April Budget. As a further example, the great majority of units in the Welsh Development Agency advance factory programme are of 5,000 sq. ft. or less. Indeed, in Portmadoc, Llandovery and Caernarvon the units are as small as 1,500 sq. ft. Local authorities are now taking a much greater lead in developing their own industrial units for small industries.
Only this week the Welsh Development Agency announced a new counselling service which will be of considerable importance to small industry. Such


industry may have expertise in a defined sector, but professionalism in marketing and other areas may be desperately needed. I hope that the Welsh Development Agency will also encourage "missionary work" among our major employers to find opportunities for local small industry which may be in the immediate vicinity. Thus, there is a move in the right direction towards a balance of activity.
I speak within a context of severe world difficulties, with increasing competition from the "threshold" countries such as Korea and Taiwan. For example, it is thought that we should consider moving away from the production of bulk steel—because, owing to labour costs, we are likely in that area to be subject to increasing competition from Third World countries—towards specialist steels. One might say that the loss of steel jobs in Wales is less than might have been expected, given the gap between capacity and demand and the relatively low productivity of our United Kingdom steel manufacturing plants compared with our major competitors. If we have in mind the loss of £30 million in the Welsh coalfields in the past year, the same argument might apply to coal.
Let me refer to one factor which was not referred to by the hon. Member for Caernarvon. There is the move towards a greater balance in the fact of a continuing increase in the number of job opportunities for women in Wales. Although I concede that we started from a low base, the female activity rate in Wales is moving increasingly closer to the national average. There has been an important improvement in the substructure for future expansion.
We are making Wales more attractive because of the accepted success of the Derelict Land Unit, now absorbed in the Welsh Development Agency. We are making Wales more accessible. The hon. Gentleman mentioned the M4 and the coming improvements in the A5. He could also have mentioned in the same context the high-speed train which in travel terms has brought Wales so much closer to London.
Wales was the first area to receive the high-speed train service. Furthermore, there is evidence of new investment throughout Mid-Wales. There appears

to be no township without its new factory and there are now more industrial employees in that area than there are farmers.
Let me deal with the Plan for Wales. Do we need such a plan? It is certainly academically respectable to argue in favour of such a plan. I am rather sceptical of the concept of a total Welsh plan and I favour much more the idea of knitting together the structure plans. For example, in the three Glamorgans and Gwent the Secretary of State has appointed a single inspector to seek to iron out the inconsistencies and contradictions that might otherwise appear.

Mr. D. E. Thomas: I appreciate the hon. Gentleman's anxiety to defend the official Welsh Office line on economic planning, but he is questioning the validity of all-Wales economic planning. What are his views on the regional economic plans which have been developed in England?

Mr. Anderson: If there is a real region economically, I believe such plans may be well-founded. But I said earlier that there was no interface between, say, the economy of Clwyd and that of West Glamorgan, but there is a necessary interface between West Glamorgan and Gwent, though not contiguous, as part of industrial South Wales. The economic regions will not be constrained by artificial political frontiers. The economy of Mid-Wales is very much linked with the industrial Midlands—for example, North Wales with Merseyside. It is nonsensical to think that one can cut Wales aside as a self-contained unit and plan to have a balance between what is happening in North Wales and in South Wales. The reality is that one can and should do so in industrial South Wales.
Although I was accused by the hon. Member for Merioneth (Mr. Thomas) of supporting the Welsh Office line, I believe that my right hon. and learned Friend's approach is more realistic but I also believe that it is not sufficient. Therefore, I hope that he will be bolder and will seek positively to iron out the contradictions. There should be an attempt within a defined economic area, as in industrial South Wales, to plan in a meaningful way. We should have some sort of framework in which coherent locational decisions can be made and we should


seek to cluster relatively similar industries within certain areas. For example, metal manufacturing activities could be clustered in the Swansea-Port Talbot complex. Furthermore, this would have relevance in seeking links with the local technical colleges. That is the kind of planning I should like to see and it goes beyond simply seeking to knit together the several structure plans under one planning inspector. We need something bolder in concept than that which is currently envisaged by the Welsh Office, but nothing as grandiose as an overall Welsh plan.

Mr. Wigley: Although the hon. Gentleman says that there is no interface between Clwyd and West Glamorgan, does he accept that the Welsh Development Agency covers the whole of Wales, it has a fund of £100 million to be used in the whole of Wales, and it has to determine priorities between different parts of Wales? Is that not a reason for having a plan to help to determine the priorities?

Mr. Anderson: But the basis of those decisions will be the natural economic regions within Wales and my argument is that the natural economic regions will be, say, industrial South Wales, Mid-Wales and North Wales. That is the essential context of the decisions that will have to be made by the Welsh Development Agency.
This is a difficult period for the Western economies as a whole. There are basic structural problems, low growth, little expectation of major growth in the immediate future, but Wales is well placed. It has a stronger economic base as a result of Government decisions, particularly those made recently. I believe that we have made major strides towards that balance which is the subject of the motion.

8.29 p.m.

Mr. Nicholas Edwards: I recently came across a speech by a Labour Cabinet Minister which seemed to sum up effectively the Government's present political approach. It presented a vivid scene of the political situation in Britain. The Minister said:
Yes, I am pretty sure that we shall have a fine autumn. There will be beautiful autumn tints of happiness in many a home and many people will say with increased conviction 'Labour gets things done'.

That has the ring of Sunny Jim and an election about it, but those were the words of Dr. Dalton, speaking to the Labour Party conference in 1946—just about six months before the Government closed two-thirds of British industry at two days notice given on a Friday afternoon in the House as Britain entered the 1947 fuel crisis. Soon there were 2 million people temporarily out of work.
In the light of that experience, perhaps I may be forgiven a little scepticism as I consider the picture that is being painted now and the whole question of economic planning.

Mr. D. E. Thomas: The hon. Gentleman is going back into history. Will he give way?

Mr. Edwards: No, I have hardly started and this is a short debate. It ill becomes Plaid Cymru Members to talk about going back into history, because they seldom get beyond the fifth century in their speeches.
The hon. Member for Caernarvon (Mr. Wigley) gave an amiable and uncontroversial assessment of the Welsh economy and expressed some unexceptionable aspirations, but his speech was singularly short of specific remedies. Indeed, he did not advance one proposal or elaborate on the form that a balanced economy should take until the end of his speech, when he referred to the grand national economic development plan.
I was flabbergasted that the hon. Gentleman did not choose to spell out the details of the sort of economic development plan that Plaid Cymru would present to us or tell us exactly what balance he thought should be provided for the Welsh economy. Of course, Plaid Cymru has done that in the past, and when considering balance in the Welsh economy we are entitled to look at some of Plaid Cymru's past proposals. In 1970, it proposed an economic plan for Wales. Essentially, it set out to calculate the number of jobs that would be needed in Wales and to describe where and in what form they should be provided.
An extraordinary and fundamental weakness of that plan was that nowhere in its 127 pages of analysis and prescription did it stop to consider who might wish to buy the products and services that were to be provided. I found it hard to take


seriously a plan which did not consider the market in which the Welsh industry and economy had to operate or the nature of the competition that we faced.

Mr. Wigley: Will the hon. Gentleman give way?

Mr. Edwards: I do not think that in a short debate such as this I should be expected to give way at the end of every second sentence. Many other hon. Members wish to take part in the debate and it would be inconsiderate to the House if I gave way frequently—especially as I have not yet said anything very controversial.

Mr. Wigley: Will the hon. Gentleman give way?

Mr. Edwards: I wish to say more about the Plaid Cymru plan. I shall give way later, so that the hon. Gentleman can have his say.
The plan was unashamedly political rather than economic and, like so many other grandiose plans, it subordinated economic reality to political faith. Nowhere was that more evident than in its total failure to give any weight to the importance of tourism, which the hon. Member for Caernarvon mentioned only briefly. Another example of the subordination of economic and other realities to a political faith has been demonstrated by Plaid Cymru's opposition to the arrival of defence jobs in Cardiff in the last few years.
Another extraordinary feature of the plan was that it sought to argue seriously that it was important to have a detailed and complete road structure within Wales, but it was suggested in at least two parts of the plan that it was doubtful whether it was a good idea to have the M4 from Cardiff to the English border, apparently on the ground that this might allow the English to come in and compete too successfully with the Welsh.
That, too, is not really surprising, because when we turn to the economic paper that Plaid Cymru presented to the Chancellor of the Exchequer in December 1976 we find that it is protectionist in its outlook. It wishes to isolate itself behind tariff barriers in a tightly directed economy. How else could it possibly achieve the detailed and specific distribution of certain industries to certain places

that was its prescription back in 1970? For example, there were to be yacht building and marine food processing in Glan Menai, clothing and furniture manufacture in Clwyd, printing and a publishing industry in Aberystwyth, and mechanical handling equipment, metal cans and central heating in the Amman Valley.
Plaid Cymru spelled out in minute detail the sort of jobs that should go to each area. All that was to be achieved by an expensive but inadequately costed combination of roads, industrial parks and State-controlled services, including the national airline to which the hon. Member for Caernarvon referred briefly, and a national development authority that at the end of the day would direct firms and people to its carefully pre-planned locations. There is little in the preparation of such plans that inspires my confidence. In that respect I share the views of the hon. Member for Swansea, East (Mr. Anderson).
The Plaid Cymru plan is based on a series of predictions, the majority of which have been falsified by events. We are bound to ask the exact nature of its plan. Is it a prediction or an aspiration? Is it permissive or is it imperative? Does it matter if it all goes wrong? It is clear that such plans are unscientific and inevitably become political rather than economic documents. In February 1974 would the Labour Party have prepared a plan and written into it the prediction that unemployment in Wales would rise to over 90,000?

Mr. Anderson: Or that Fords might go to Bridgend?

Mr. Edwards: Yes—or that Fords might go to Bridgend? That is so for rather different reasons. There is the impossibility of forecasting that sort of event rather than the political embarrassment of doing so.

Mr. Walter Padley: rose—

Mr. Edwards: No. I refused to give way to the hon. Member for Caernarvon.

Mr. Padley: The hon. Gentleman referred to my constituency.

Mr. Edwards: I did not refer to the constituency of the hon. Member for Ogmore (Mr. Padley) in any detail. I


responded to an intervention made by the hon. Member for Swansea, East.
The effort that goes into the production of such plans is immense, but if a Chancellor is not able to predict events from month to month it is hard to understand how they can be predicted effectively over decades. Plans are launched in a great flurry of enthusiasm, as in 1965, only to be scrapped a year or so later.

Mr. Wigley: The hon. Gentleman has spent a considerable time attacking the document that my party published in 1970. He has not chosen to do so in any detail. It is clear that he has not read more than half the plan. It consisted of 280 pages, and he referred to only 127. Does he accept that in the private sector, which he likes so much, companies produce development plans? Despite the vagaries and uncertainties of the economic world, they find the production of such plans much better than going about their business haphazardly and in a vacuum. They are recognised as being beneficial in industrial and economic terms in the private sector. Surely that benefit can also exist in the public sector.

Mr. Edwards: Such grandiose plans tend to produce political aspirations, which the industrial plan does not. The plan of the factory can be tightly realistic. It is referred to only within a small circle and does not seek to convince or persuade others. The real weakness of planning on this kind of scale is that it is based on the unfounded and alarming assumption that a small group of experts can decide where future successes will arise. The things that follow then become inevitable. Either one drops the whole thing in embarrassed silence when predictions go wrong or one makes them happen. That can be done only in an isolationist, closely directed State, which is likely to be incompatible with economic freedom.

Mr. Cledwyn Hughes: Will the hon. Gentleman give way?

Mr. Edwards: Well—

Mr. Cledwyn Hughes: It is one of the courtesies of the House. In any event, the hon. Gentleman is making a very long speech for a short debate. He said that the Labour Government produced a

plan in 1965 and abandoned it 12 months later. What plan was that? I was responsible for the plan that was published in 1967, which was not abandoned. I am not saying that it was perfect—it was imperfect in many ways—but it originated the M4, which the hon. Gentleman and others said was a reasonable proposal and actually supported. If he is to make these statements, he should get his facts right.

Mr. Edwards: I was referring to the then Mr. George Brown's economic plan. I know that the right hon. Gentleman's plan for Wales was very important, but it was not the only plan produced by the Labour Government at that time. It is an interesting commentary on planning that the right hon. Gentleman has apparently forgotten that grandiose exercise in national planning. A plan as specific in its remedies as Plaid Cymru's must involve direction of labour as well as of companies. I have no reason to believe that that kind of isolationist, directed economy is likely to produce better results than one which is left to free market forces. Indeed, the experience of the twentieth century suggests precisely the opposite.
I do not believe that it is the proper function of Governments—at least in a free society—to impose an exact pattern or to build to a precise blueprint of that kind, and I am sceptical about the outcome.
Goverments can affect the balance in the relationship between the productive and the consuming parts of the economy. In Wales, the Government have the power decisively to affect the balance between a weak private sector and a top-heavy centralised public sector, which, for historic reasons, is concentrated on the declining industries.
Governments, by their policies, can play a large part in deciding whether we are to have a vigorous, innovative, energetic, high-production, high-wage, expanding economy, with the strength to provide improved social benefits, or a rigid, protected, immobile, stagnant, low-production, low-wage economy, providing worse social benefits. The Government, by their policy decisions of the last few months, have shown that they have opted for the latter rather than for the former, and have revealed the stark contrast


between what they and the Conservative Party offer to the British electorate.
For two years the Government told us that to cut public expenditure was impossible and that to do so would drive up unemployment. Along came the IMF and forced them to do it, and unemployment began marginally to fall. Last spring, having taken measures that could have put us on the road to recovery, they threw them all away and got the balance wrong by increasing public expenditure again and resisting tax cuts which could have revitalised the economy. The June financial crisis and the fourteenth Budget became inevitable with the decisions on public expenditure earlier in the year.
In simple terms, the Government destroyed confidence in the market and found that they could not borrow. That is where the balance of the Welsh economy is principally wrong at present. It is wrong in terms not of industrial structure but of the relationship of income to expenditure. On top of all the borrowing of recent years, we suddenly had a commitment to increase public spending at more than twice the Chancellor's most optimistic estimate of the growth in the economy, with the market well aware that his previous estimates had proved wildly over-optimistic. Therefore, the confidence of the market collapsed. As a result, we had the credit squeeze and, above all, the increase in the employment tax.
Once again, the wealth-creating part of our society is being squeezed to accommodate the Government's expansionist follies. Once again, on the Chancellor's own admission, the liquidity of our largest companies is being bled when they should be poised for fresh investment. For many small businesses the credit squeeze will be the straw that breaks the camel's back.
I am told that Welsh industry has taken it very badly, that the harshest comments are being made, and that it has had a very bad effect on confidence. The most cautious estimate of the Welsh CBI is that the measure will destroy 3,000 jobs in Wales. That figure would be higher, it says, but for the Welsh over-dependence on public sector employment. But it is as well to remember that the tax applies to public sector jobs too, and I believe that the impact will be greater than the CBI estimates.
It seems incredible that at a time when we are trying to encourage job creation in the regions, the Government should impose an extra tax which will fall most severely on labour-intensive sectors. It is a striking fact that gross expenditure on the special employment and training measures at present being operated will be just over £500 million in the current financial year, while the extra tax is taking £500 million away from industry.
There is growing complacency among the Government about the current unemployment figures. We must be thankful for any improvement, but it would be wrong to imagine that things are getting better for Wales. Unemployment there this June is about 7,000 higher than it was in June last year, and almost 13,000 higher than in June the previous year. Between June and July last year unemployment in Wales jumped by 12,400 as the schoolleavers came on to the register. A jump on a comparable scale this July would put unemployment perilously close to the 100,000 mark. When we take account of redundancies already announced, and the effect of the Chancellor's recent tax on employment, the prospect that that figure will be reached remains horrifyingly real.
The Government claim credit for the success of their emergency measures. They say that they have saved between 50,000 and 60,000 jobs in Wales. But there is a world of difference between temporary employment and genuine long-term jobs. In the present desperate situation, job creation and work experience schemes have an essential and important part to play, just as do analgesics in medicine. Undoubtedly it is also true that the more these schemes can be directed towards preparation for future employment the more valuable they will be. I shall have something to say about that in the Welsh Grand Committee next Wednesday.
In spite of all that, the jobs provided under these schemes remain very much second-best for those involved and they disguise the real scale of unemployment. That remains a black indictment of Labour's economic record in the past few years.
I should have liked to comment on the latest of a long stream of rather unreliable industrial production figures, but


apparently the computer has broken down, and the latest statistics that are available take us only up to the end of last year. These figures, which were pretty poor, showed that last year we were producing less than in 1976, that we were producing less than in 1974, in the three-day working week, and substantially less than at the peak of production in 1973.
Since then, I will be told, there has been something of a recovery in consumer spending as the pre-election boom-let gets under way. The CBI in Wales tells me that overall it can detect only a slight upturn. It describes conditions as patchy. It points out that some sectors, notably steel, are still doing badly, and it says that it can detect no long-term optimism. The order books of industry do not stretch very far ahead.
So, after four and half years of Labour Government, there still seems to be no real prospect of a break-out from the era of stagnation, low production and high unemployment that has characterised, and indeed, always characterises, the years of Socialism.
We live in a world in which industry is debilitated by high taxes, made complacent by subsidy and burdened by bureacracy. We live also in a world of rapid change. There is a terrible danger that economic plans will act as a barrier to change, that a particular concept of a balanced economy will stultify, that political pressure will provide the temptation to resist changes which are an essential forerunner of new growth.
The Government's role in all this, in industrial terms, must be to protect people against the too violent impact, in social terms, of change, to provide a developing infrastructure for the future, to provide assistance for those who are setting up or moving, and to do that by reacting flexibly to economic rather than to political demands.
It is because I believe in regional policy in those terms and because I am impressed by the realistic approach of those involved in Wales that I have become a convert—belatedly, I freely admit —to the Development Agency concept, and would pursue regional policies based on it.
Above all, what we must do is to create a general economic climate for high levels of production, high wages and high profits. We believe that that will he done not by Socialist or Plaid Cymru planning but by releasing the energies, enterprise and skill of individuals. We must recreate incentive, allow people to keep more of what they earn, restore differentials, and cut direct taxation at all levels.
The real hope for future jobs in Wales lies not with grandoise plans for a balanced economy but in the hundreds of small and expanding businesses that can react through the market to changing demand and provide a living, flexible and dynamic economy and in Government policies that recognise that it is their prime duty to create the climate in which those developing businesses can succeed. It is that approach that offers the best hope for the Welsh people.

8.52 p.m.

Mr. Ifor Davies: The hon. Member for Pembroke (Mr. Edwards) spent a great deal of time talking about planning, even saying that he is a convert to the work of the WDA. I shall follow him in those matters later in my speech
However, I should like to turn straight away to the opening speech of the hon. Member for Caernarvon (Mr. Wigley) and the motion. The hon. Member emphasised the need for a balanced economic order for Wales, but I did not detect in that speech equal emphasis on the need to recognise the dependence of Wales on outside economic forces. There is a need to realise that Wales needs to obtain the fresh industry required to strengthen the basis of future prosperity. Wales must compete not just with the other assisted areas within the United Kingdom but also with the whole of Western Europe and the rest of the Western world.
The fact is that the Welsh economy is today undergoing a transformation as sweeping and far reaching in scope—but much faster in pace—as all the changes that it went through during the industrial revolution. The earlier transformation was from a predominantly agricultural economy to dependence upon a few heavy industries. The first stage was based on the exploitation of limited iron and mineral resources. The second stage


arose from a worldwide demand for coal for the rapid development of transport, steel and constructive industries.
At present, Wales is passing through a period of unusually rapid economic change. The changes now in progress are largely from the basic industries to newer industries, such as chemicals and oil refining, aircraft and motors, electronic engineering and electronics.
The increase in adoption of automation is also bringing fresh challenges. The greatest challenge of all, of course, demands planning. It is said that planning means different things to different people. I recall Stafford Cripps referring to planning as
…the most potent principle of social cohesion that man possesses—and the most effective means of transforming a community into a just society.
That is true, but the essence of planning lies in trying to identify and where possible to quantify the problems and then seeking to work out in the light of the available resources the policies that best promote their solution.
These are the very objectives which have guided the Government in dealing with the Welsh economy. In recent years an economic strategy has been pursued with two overriding aims—first, to reduce inflation and, second, to regenerate industry. The success achieved in the fight against inflation is self-evident and cannot be denied, so I turn to the other priority of regenerating industry.
The most important single feature of the structure of the economy of Wales is the fact that it is the nearest of Britain's peripheral assisted regions to the dual centres of economic and political power, whether by road, rail or air. Our ports supply modernised and specialist facilities for rapid import and export. The acceptance of the Cardiff-Wales Airport as the official airport for Wales and the West gives a further guarantee of its future growth, with an increase in its direct connections with continental centres.
The Welsh ports handle between a quarter and a fifth of all foreign and coastwise traffic passing through British ports. Consequently, the nearness of Wales to market centres provides her with a permanent advantage over peripheral regions. The completion in the

near future of the M4 across South Wales —the Secretary of State can rightly take pride in this—together with the highspeed trains, will improve communications in the most significant way.
All this, together with the selective assistance available from the Welsh Office industry division and the increased incentives recently announced for special development areas, presents an impressive array of weapons with which to tackle Welsh economic problems.
Industrially, however, Wales has long been dominated by its heavy industries. Since Wales was more specialised than any other region in coal and steel, so the need for new jobs to replace the rundown in those basic industries has been and remains greater than elsewhere. For example, it is estimated that over the past decade Wales has lost over 80,000 male jobs. Employment in mining has fallen by 52,000 or 55 per cent., in agriculture by 13,000 or 33 per cent. and in metal manufacture by 16,000 or 16 per cent.
The concern about unemployment is not confined to one party. Every hon. Member is disturbed particularly over youth employment, which I gather the Welsh Grand Committee is to debate next week. I welcome this month's figures, which show that unemployment has fallen again. I think that the figure now is 86,534, which means a reduction of about 7,000 since last January—within six months.
A necessary accompaniment of the rundown in labour in the traditional industries is an extensive modernisation programme with substantial investment, but the speed of the rundown in employment in those basic industries has meant that Wales could not possibly have supplied the required number of jobs simply from the extension of smaller industries. In other words, Wales has had to rely heavily on attracting new industries from outside, notably from overseas.
Incidentally, these overseas firms account for the employment of over 60,000 people, or almost twice as many as are employed now in the coal industry. It is fortunate that, in the highly competitive business of attracting overseas firms, Wales has cumulatively acquired an impressive record. I wish that we had heard a bit more about that.
Despite the unfavourable economic environment of the world recession, confidence in Wales as an industrial location has been amply demonstrated. The latest example, of course—there has already been reference to it—is Ford's decision to invest £250 million at Bridgend, in the face of strong international competition from Germany, Spain and Ireland. Moreover, investment on an even greater scale is in process by the oil firms in the constituency of the hon. Member for Pembroke.
It is significant also that four out of the six Japanese manufacturing firms in Britain have chosen to locate themselves in Wales. The new extension by Hoover at Merthyr and the additional investment by Alcoa at Swansea are impressive developments, too.
This overseas investment in Wales is not simply a verbal expression of confidence but is, rather, a practical declaration of faith, and is in direct contrast, if I may say so, to the attitude of some politicians.
After many years when the economic environment in Wales has been on a low key, it is now vital for the confidence shown in Wales by overseas firms to inject itself into the stimulation of indigenous industries. This is the great need now, for one of the most remarkable facts of the past few decades has been that nearly two-thirds of the new jobs in many industries have come from outside Wales.
Although outside investment will continue to play a vital part, it is essential—I agree here with what was said by the hon. Member for Pembroke—to raise the growth rate of indigenous industry, and this applies especially to the smaller firms in Wales. The Welsh Development Agency has a great part to play in this direction in particular by aiming to build on the small and medium-size firms already located in Wales, in addition, of course, to its highly successful achievements in promoting Wales as a location for new industry.
Despite the substantial progress which has been made to achieve a balanced economic order through the diversification of the economy in the Principality, Wales is still very much dependent upon the traditional industries of coal and steel.
The future for coal looks considerably brighter—brighter, indeed, than has been recognised by some hon. Members in the debate—with a £16 million investment in Europe's largest anthracite mine at Bettws, which will give employment to over 500 miners for 25 years. This investment is part of an already agreed programme of £54 million currently being spent by the National Coal Board in Wales.
Neither past nor present economic difficulties should blind us to the promising fact that Wales has an abundant supply of anthracite and coking coal, both of which are becoming increasingly scarce and highly valuable products throughout the world.
It is regrettable that the same promising account cannot be given for the steel industry, which has been caught up in the most savage world recession. Nevertheless, the steel industry remains, and will always remain, the supplier of the lifeblood of all our industrial activities. In this context I take the opportunity of urging upon the Government and the British Steel Corporation—I am confident that I carry with me the Joint Steel Committee of the West Wales area—that there should be no delay in proceeding with the selective investment at Port Talbot as agreed and confirmed by every recent report on the industry. This investment is essential to ensure and sustain the quality of production. Wales still produces virtually all of Britain's tin plate at Trostre and Velindre in my constituency and in Ebbw Vale. Since they are Port Talbot's biggest customers, the quality of production there is a vital factor for the future of these industries in world markets.
There have been encouraging signs of the expansion of our economy in the report from the Central Statistical Office and the Government's economic progress report. The report says:
The index of industrial production was over 14 per cent. higher in the first quarter of 1978 than in the previous quarter; that for manufacturing alone was a little over 1 per cent. higher. There are now some signs of resumed growth in the underlying level of industrial production.
Given a reasonable expansion of the economy combined with a dynamic attitude within Wales to equal the inspiring faith shown by overseas investors, I am confident that Wales stands on the threshold of a new economic order. I believe


that, although our problems are formidable, they can and will be overcome.

9.6 p.m.

Mr. Geraint Howells: I am sure that all hon. Members will agree that there is a need for a balanced economy in Wales. How do we achieve that? Every political party produces its own plans. We have had such plans for the past 20 or 30 years. Some have been good, others have been bad. Over the years, successive Governments have taken heed of the views of various organisations which have said that they ought to improve the economy of rural Wales, North and South Wales and even Mid-Wales. I confine my remarks to rural Wales. I believe that the Welsh Development Agency has done excellent work in many parts of the country.
Mid-Wales is greatly dependent on agriculture, on the Rural Development Board, the servicing industries and small business men. I am sure that all hon. Members are aware that there are more small businesses and more self-employed people in Mid-Wales than in any other part of Britain. The importance of the small business to the Welsh economy, especially to rural Wales, is great. Perhaps not many hon. Members on the Tory Benches will give the Liberal Party due credit for what it has done in the past 18 months, but the majority of small business men and farmers have said to me that as a result of the Lib-Lab agreement the Liberal Party has done more good in the past 18 months than the two major parties have done in the past 20 years.
The average working wage in Mid-Wales is one of the lowest in the country. Many workers in the servicing industries and in factories there have said that it is not worth working because the social security benefits are higher than the wage packet. What plans has the Minister to improve the average wage of the working man in rural Wales? I confess that times are much better in rural Wales in 1978 than they were in 1938. I remember that my school males in those days had to leave rural Wales to look for work in South Wales, the Midlands and London. Fortunately, today we are able to keep our young people in the rural areas. With the benefits that accrue to them—and perhaps one day the Development Board for Rural Wales and other organisations will be able to help them—

they may stay with us in Mid-Wales, improve the economy and stop rural depopulation.
One of the greatest tragedies of Mid-Wales has been the failure over the years to attract enough industry capable of using the potential of the work force. Although I applaud the efforts of the Development Board, as yet it has not the necessary teeth and finance to effect a transformation. But it has done excellent work to date. The number of vacant factories on 1st April 1977 was 36. The number of factories let between 1st April 1977 and 31st March 1978 was 22. That is not a bad record. Factories under negotiation at 31st March 1978 totalled seven. The number of factories still available is seven.
The Development Board says that it now owns 104 factories, of which 44 are in Newtown and 60 are in other Mid-Wales towns. It intends to build another 14 factories in Newtown, four in Rhayader, two in Cardigan, two in Lampeter and a few in Merionethshire and Montgomeryshire.
I wonder whether too many factories are being erected in one town in Mid-Wales, because 44 plus an extra 14 will make a total of 58, while we have only 60 for the rest of Mid-Wales. It is the Liberal Party's wish that more factories should be built in other towns in Mid-Wales in case the tendency increases for people to move from other parts of Mid-Wales to Newtown in Montgomeryshire.
The biggest problem of all in rural Wales and Mid-Wales is communications. Without better roads and rail services we cannot possibly hope to see firms risking money and reputation to set up factories there. We must improve incentives to industrialists. We must use EEC funds. If we could upgrade the road between Shrewsbury and Aberystwyth, that would entice many industrialists to the Welsh coast. I hope that the Minister will repeat the assurance that the railway line —the only one in Mid-Wales—from Aberystwyth to Shrewsbury will remain open for the future development of the economy of rural Wales.
There are many other aspects that I should like to discuss, but because of the shortage of time I will conclude by saying that when we have a Welsh Assembly we shall be able to devote more time to


the economy of rural Wales instead of debating the future economy of Wales in this House for two hours now and again, which is not enough. Once we have the Assembly, its Members will get together, and I hope that there will be a great improvement in the economy and that it will be a balanced economy.

9.14 p.m.

Mr. Ioan Evans: Before the hon. Member for Cardigan (Mr. Howells) spoke, I intended to say what a delight it was to be talking about Welsh affairs without having to talk about the Assembly, and I was going to welcome that as a pleasant change. I applaud Plaid Cymru for choosing to speak about the economy. It appears that Plaid Cymru is now getting its priorities right. There is more concern in Wales about the economy and about jobs than there is talk about the Assembly.
The hon. Member for Caernarvon (Mr. Wigley) has already been complimented on the mild and moderate way in which he presented his case. It was thought that there would be talk about independence for Wales. That is a policy put forward by people who I believe have lost their sense of value. However, we have heard nothing about it in this debate so far. What we have had is a discussion of economic affairs.
The hon. Member for Cardigan referred to advance factories, which was also a point mentioned by the hon. Member for Caernarvon. There is concern when advance factories are empty. I should tell hon. Members that if their constituencies contain advance factories which are not wanted, they would be welcomed in the Valleys. They would be welcome in the Cynon Valley. One of the problems in the past has been that industrialists have come into these areas, but those industries have been lost because advance factories were available in other areas. I therefore appeal to my hon. Friend the Minister to continue the policy of making sure that advance factories are available.
I thought the hon. Member for Caernarvon was rather unfair when he made reference to the Welsh Development Agency and compared it with the Development Board for Rural Wales. They are both new organisations with different

tasks. I believe that the Welsh Development Agency has got off to a good start, and it is wrong to compare one with the other. I am sure that we all wish both of them well in the future.
I should like briefly to make special reference to the Valleys of South Wales. Let us not talk about Wales as being an economic unit which can be separate from the rest of Britain. That view has not arisen in the debate, and it is jest as well. But within Wales itself there is concern about the Valleys, which spread from Newport to Llanelli, because there has been a development of the economy in certain parts rather than in others.
As the Minister knows, I joined the Mid-Glamorgan deputation earlier this week when it came to see the Secretary of State and himself. We were courteously received at the Welsh Office. The representatives of the Mid-Glamorgan County Council pointed out—as the Secretary of State is well aware—that the problems of the Mid-Glamorgan county are widespread and include poor quality housing, outdated school buildings, inadequate highways, polluted rivers and high unemployment. In many ways, these are interrelated, especially in the sense that the quality of the environment and infrastructure can be an important factor in influencing the decisions of firms to locate in an area.
However, I should like to concentrate on the difficulties of obtaining employment because in the main the deputation was most concerned about jobs. I believe that the Mid-Glamorgan county has submitted its county structure plan in which priority is given to development in the Valleys. I believe that an important contribution was made by the socioeconomic research group of Ty Toronto which, following its conference in the Year of the Valleys, brought forward a document referring to the Government White Paper produced by the Welsh Office in 1967 entitled "Wales: the Way Ahead". It stated:
For both economic and social reasons the Government reject any policy which would assume the disintegration of the substantial valley communities, and they propose instead to seek a solution in an integrated plan of development for South Wales as a whole, recognising the close interlocking of economic and social activity and interdependence of interest between the valleys and the rest of South Wales".


The Valleys of South Wales are distinct from the rest of South Wales as an identifiable area, and the Government's policy must continue to be to reinvigorate Valley life and to bring about a renewal of life in the Valley communities.
The statement by those who participated in the Year of the Valleys Conference made three affirmations. They said:
First, the situation in the valleys is urgent. It is deteriorating, and this deterioration has inevitable long-term consequences. Secondly, the primary need is to develop a sound economic basis. This demands an explicit up-to-date regional policy for South Wales within which regional planning can operate and of which the participating public is aware. Thirdly, for this purpose the valleys must be recognised as a distinct entity within the region both by the Welsh Office and central Government on the one hand and by the separate valley communities and local authorities on the other.
There is a deep concern that the substantial Valley communities could be losing out to the non-Valley parts of the Welsh region. Although obviously we welcome the development of the M4—and my hon. Friends the Members for Gower (Mr. Davies) and Swansea, East (Mr. Anderson) referred to the tremendous achievements by this Government to improve the community—there is a fear now that, unless there is deliberate Government policy, the positive development will shift from the Valleys to the areas along the M4. Obviously we want to see development along the M4. We do not want to argue one area against another. But there is concern in the Valleys that they must get their fair share of what is to be allocated by the Government.
The Valleys have an unusual strength of community feeling, a real sense of belonging, a fine physical and historic setting and a powerful economic motive for making the effort to re-create an urban life based on the highest standards. We have the schools, the churches and the chapels. We now have coming the sports centres. There is a real community life, and we have to ensure that the jobs are brought into these areas which means factories going there.
As well as developing the manufacturing side, there should as well be some provision of jobs in the service industries. We talk about planning, but we find that there are certain areas where there are

service jobs. In the Valleys, there has been a complete dependence in the past on the coal industry, and even now there is an imbalance because what development there has been has been in manufacturing jobs. The Government have been moving civil servants down from London into Wales. As well as moving them from one city area to another, why do not we have some office development put into the Heads of the Valleys. Why do not we ask the Welsh Development Agency, as well as building advance factories, to build advance office premises so that the Government can direct service jobs into these areas?
Mid-Glamorgan has the largest area of derelict land. I say again that the Welsh Development Agency has taken up where the Derelict Land Unit left off, and it has done a tremendous job. When derelict land is reclaimed, we should ensure that it is used for the siting of new industries. There is a tendency to take good agricultural land for factory building. Why not use this derelict land?
The record of this Government, which we shall be putting before the country in the forthcoming months, is one of achievement while we have been going through a period of world recession, and it is no use people talking about unemployment without relating it to the unemployment figures of other countries.
There are still tasks which need to be determined, and I hope that greater financial resources will be put at the disposal of the Welsh Development Agency and the rural board so that these matters can be tackled. The real problem concerning the people of Wales is not whether they should have an Assembly. The vast majority of people look upon that as an irrelevance. The real problem is the lack of jobs.
I believe that the Government have started well. Let them ensure that we get back to full employment as soon as possible and continue to demonstrate their concern about the problems of those who live in the Valleys of South Wales

9.25 p.m.

Mr. Gwynfor Evans: When we were considering the subject for discussion in this debate, one of the matters that came to mind was the splendid report of the Welsh Language Council.


I hope that there will be an opportunity to discuss that very important report. But the subject that we have chosen bears a close relationship to the question of language and culture in Wales. The effect of depopulation and migration, following heavy unemployment, has been disastrous for the Welsh language and culture.
There is another relationship as well. When a culture is thriving and healthy it affects the morale of the people, and this reflects itself in their economic life. I had an example of this a few weeks ago, when I was in the Basque country, where I was deeply impressed by the people's enthusiasm and loyalty for their language and culture. The Basque language is spoken by only 23 per cent. of the people —it is similar to ours in that sense—yet it reflects itself in the economic life of the province in many ways.
It is reflected in the extraordinary complex of the co-operatives—the Mon-dragon complex. I visited a number of these co-operatives, which employ more than 17,000 people. The first one was started as recently as 1956, and in the period of more than 21 years since then not one person has lost a job.
One noticed that in the very sophisticated and highly computerised industries—the main computers are to be found in a beautiful building above the valley of Mondragon—all the notices were bilingual and all the publications of the Mondragon centre were also bilingual. This reflects the value of a healthy culture and the attachment of the culture to the economic life of the people.

Mr. Michael Roberts: I appreciate the lion. Member's very important points about the relationship between the economy and the culture of a country. I refer to the publication "The Future for the Welsh Language", where it is suggested that the Welsh language should be built into considerations of economic planning. Is there not something of a dilemma here The publication refers to the monolingual key workers who come into the community and change the nature of it. Is there not a dilemma in developing the economy and protecting the culture of our country?

Mr. Evans: That is the kind of situation that I am trying to illustrate. We have had a great influx of non-Welsh speaking people into our community and we have the difficulty of trying to assimilate them fully. In the report it is suggested that we begin with the children—the three, four and five-year-olds. The report suggests that that is the best way in which to act.
One has to admit that nationalism in a country such as Euzkadi is a great moral power. People seem to approve of nationalism there, as they do in Catalonia, Romania, Hungary, Poland, Latvia, and Lithuania. But for some reason nationalism is derided in Wales. However, if we can release that moral power in Wales it will have a tremendous effect not only on our cultural life but economically.
We therefore approach the subject of a country's balanced economic order as if it were a seamless web, in which action in each part of the life of the country affects every other part.
This argument also applies to the infrastructure of the country, such as with roads. That infrastructure is basically important to any balanced development. For example, in terms of communication the M4 is a great accomplishment, as is the magnificant piece of motorway as far as Abercynon. But if we consider Wales as a national entity, we believe that there should be a spine road through Wales and that the roads running from the middle to the West and to the East, should run from that spine. In that way every part of the country could be developed. In the West, industry suffers because of inadequate roads.
The kind of industry we can expect to be developed in the West must depend on adequate road communications more than is the case in the East. I doubt whether the Ford Motor Company would have come to Bridgend if it were not for the proximity of the M4. Even in highly industrialised parts of Wales, a good road system immensely important.
If we want to develop light industry in the rural West, we must certainly have the right kind of roads. We have been told time and again by industrialists who are trying to operate in the West that the transport problem is their main difficulty. There should be an effort in the West to


develop the kind of industries that would use the products of animals and other native materials. There is room, for example, for a canning industry and for all the products one finds in a cow, a sheep or whatever the animal may be. We should be in a position to develop our raw materials in the country, which means in a position to develop our coastal fishing and to use our slate waste in some parts of Wales. We should also use the peat we have in many areas. That kind of industry depends very much on good transport and adequate communications.
I am glad to see that the Development Board for Rural Wales is adopting a more aggressive policy, which is to be commended. I wish that the Welsh Development Agency would pursue an equally aggressive policy in rural parts of Wales. I am glad that the Agency is showing a greater interest in rural Wales, but it is not yet in the position of the Scottish Development Agency, which has invested about £17 million in 30 sophisticated industries and thereby saved 8,000 jobs. It has done so often in cases involving considerable risk. I wish that the WDA would take more risks in its investment.
I believe that central Government could do more than they are doing, because they are major customers in respect of many industries. The Government could use their influence to direct more work towards those parts of Wales which are so lacking in industry.
Local government could also do more in this respect. It is foolish that local government, which uses so much furniture and other products in schools, imports all this material from outside Wales. We should be manufacturing that furniture and other items in Wales. The fact that we are not doing so is part of the reason for our economic imbalance.
I have mentioned roads. I wish also to mention the railways. British Rail made a great mistake in closing the line between Carmarthen and Aberystwyth. When that line existed, one could travel from Swansea to Carmarthen in a matter of hours. It was also possible, in those days, to make a circular journey round Wales. That is not now possible. That line was important to the tourist industry. We should not depend too much on the tourist industry, but it is the fastest grow-

ing industry in Wales and will bring in something like £300 million this year.
Evidence of the neglect of our railways is demonstrated by the failure to electrify any of them. I do not apologise for returning to this subject, which I have mentioned more than once. In England, there are 2,350 miles of electrified railway, which accounts for about 40 per cent. of train mileage. Yet England, even with that amount of electrification, is only 17th in the league of countries with electrified railways. Wales has not a single mile of electrified railway.
We have also failed to take advantage of the tremendous asset represented by our Welsh ports. There is certainly room for development there. Even now, they are responsible for 32 per cent. of the profits of the British Transport Docks Board respite the fact that trade in these ports has been declining steadily since 1974.
These ports have advantages which are not found in most ports in the United Kingdom or on the Continent. They have deep water close to the shore, plenty of room for manoeuvrability, they are well placed for world trade, and there is none of the congestion that causes so much trouble in the English Channel. One of those ports should have become a Europort by now. With the right sort of land bridge between the ports and the populous Midlands of England and London, and an Assembly of the sort that the hon. Member for Aberdare (Mr. Evans) does not wish to see, we would have stimulated development among our ports. A person who speaks with great authority on these matters told me recently that if Wales had a Parliament of her own, the ports would really take off.
We have heard that great numbers of people have lost work in agriculture and coal and are losing jobs in steel. It is not always realised that one Welshman in 10 works in the steel industry. It is still immensely important to us and it must see a greater technological mix and a greater mix of products. We must also reduce our dependence on steel and old-fashioned industries generally.
We need plenty of jobs for young Welsh scientists. We have next to nothing for them in Wales. We need jobs for highly technically trained Welshmen. We have


no computer industry, and not one Government scientific research centre. It is an extraordinary situation.

Mr. D. E. Thomas: Is my hon. Friend aware that the Institute of Geological Sciences recently relocated its headquarters in Nottingham? The Secretary of State for Education, who is ultimately responsible for the work of the Institute, told me in correspondence that it was not possible for the Institute to be devolved to Wales, even for its Welsh functions, because the geological structure of Wales was linked in with that of England. This has meant that at least 30 top geological jobs have been lost to Wales. Apparently, the geology of Scotland is separate because the IGS is devolved in Scotland.

Mr. Evans: I am grateful for my hon. Friend's intervention.
I draw my remarks to a close to allow the Under-Secretary of State to reply. We have 100,000 fewer jobs for Welsh men in Wales today than we had a decade ago. Wales is the only area in this island which in the past six months has seen a deterioration in employment opportunities. The only comparable area is Northern Ireland, which is outside this island. This is a heavy condemnation of the Government and emphasises the pressing need for greater development inside Wales.
Professor Glyn Davies has said that by the early 1990s we shall need at least 1,500 new manufacturing industries in Wales to cope with the task with which we are faced. That is where the importance of a plan comes into being. I know that the idea of a national plan is rejected by the Government, but I emphasise that it has the enthusiastic support of the Council for the Principality. Even the leader of the Conservatives on the Cardiff City Council has spoken of the need for a strategy for the whole of Wales. The same thinking is found in the support given by the Welsh Council to the Welsh TUC's demand for a Welsh "Neddy". That is an area of immense importance, and precisely the area in which the work of a Welsh Assembly could be shown at its best. It should be in a position to supervise that area with effect.

9.42 p.m.

The Under-Secretary of State for Wales (Mr. Alec Jones): When I first read the

terms of the motion—the need for a balanced economic order for Wales—I was not quite sure what Plaid Cymru Members meant. Having listened to the debate, I am not a great deal wiser. What we have, heard in the debate has been rather similar to saying that one is in favour of virtue but not quite sure how to define it or spell it out.
In the past the nationalists have always spoken as if the problems of Wales were unique and could be solved by action in Wales alone. However, I detected a glimmer of hope. I know that my hon. Friend the Member for Gower (Mr. Davies) did not detect the same glimmer. It seems that Plaid Cymru Members have learned something from the experiences of the past few years, which have demonstrated clearly the interdependence of the economies of the developed nations of the world. I hope that they now accept that action in Wales by Wales alone, or in the United Kingdom by the United Kingdom alone, could not solve the problems arising from a generally depressed level of world economic activity. It requires a combined effort from many countries to put us back on the path of higher growth rates.
I cast my mind back to what the nationalists said in their economic plan for Wales of the early 1970s. I assure the nationalists that I have not reread it today. As I recall, the essence of the plan was the assumption that if Wales were a self-governed entity, cast adrift from the rest of the United Kingdom, but not too far adrift, substantial cuts in the defence budget for Wales would make money available, without any increase in taxation, to build up the industrial structure at selected growth centres. There was the assumption that certain specified industries—those with good prospects for expansion—would be located at those centres.
I recall that the nationalists talked of selected growth points—nine main centres and 17 secondary centres. By implication, if there is a concentration of growth in those centres there will be nil growth in other parts of Wales. That would not be acceptable to the hon. Member for Rhondda or to the people of Rhondda. We in Rhondda welcome the development of Llantrisant. I would not want to contemplate a nil growth in that sort of area. Many other areas in Wales


were not included as main or secondary centres for growth. There are areas that desperately need growth at this moment.

Mr. Wigley: rose�ž

Mr. Jones: No, I shall not give way. I lost some time and I did not take advantage of an opening speech. I am sure that the hon. Gentleman will take that into account.
I looked at Powys. That great plan of 1970 listed Newtown as a main growth centre. I do not think that we needed a plan. Newtown had already been designated as a new town for that purpose; and it has been a very successful new town. It has a population topping 8,000, 800 new houses and 1,100 new jobs in the Development Board's 44 factories, which are now all let.
What about the rest of Powys? There is not even a secondary growth centre of Llandrindod, Builth or Welshpool. I hope that the people resident there will recall that. But, most important, the plan did not indicate how the growth was to be achieved. One can paint all kinds of castles in the sky, but how does one get the growth that is needed?
Many people make a respectable argument for the direction of labour. But the plan did not say that was how the nationalists would induce growth into those areas. The hon. Member for Caernarvon (Mr. Wigley) said that Plaid Cymru would seek to encourage industrial investment from outside. However, I suspect that direction would not be regarded as encouragement.
The plan went even further than selecting specific spots. It nominated specific industries for those centres. Does that mean that other non-nominated industries would be turned away from those selected spots? Glan Menai was nominated for electronics, yacht building, aluminium and marine food processing. If we had followed that plan, we should have turned down the Rehau plastics factory at Blaenau Ffestiniog.
The plan is not a plan. It is hardly worth the paper on which it is written. Had we adopted and adhered to that kind of plan, the Ford development at Bridgend would not have fitted in, because Bridgend was not designed for that kind of development. I believe that

Shoni bob ochor himself must have been the architect of that plan. I suspect that he is very much alive in the nationalist party at this moment.
In the nationalists' plan, Llantrisant is designated as a secondary growth point. But as I read in my local paper and as my hon. Friend the Member for Pontypridd (Mr. John) tells me, the nationalist candidate at Pontypridd is actively opposed to any further industrial development on the most suitable site in that specified secondary growth centre.
I do not wish to spend any more time on what I believe is cloud cuckoo land. The problems affecting Wales are too important for that.
I refute the charge made by the hon. Member for Pembroke (Mr. Edwards) that we are complacent about unemployment. One may criticise or say that the Government should have done something else, but I do not think that it can fairly be said that we have been complacent about unemployment.
Unemployment remains far too high�žthere is no dispute in the House about that—but we are grappling with the problem, and I believe that it will be overcome. However, it would be to mislead the people of Wales if we did not indicate that it is a difficult task and likely to he a long task before it is finally resolved.
In the meantime, the Government have introduced a most wide-ranging set of measures to preserve or to create employment. I am not sure whether the hon. Member for Pembroke is in favour of those measures. I make no apology for the 60,000 jobs saved or created in Wales by these measures or for the £55 million expended in the process. What would those who criticise have done? It is simply not good enough constantly to parrot cry about the need to reduce public expenditure without specifying what services would be cut.
Would he cut the selective financial assistance which has been of such enormous benefit to us in Wales? Would he cut the special help that we have given to the Cardiff and Ebbw Vale steel closure areas? Would the Welsh Development Agency and the Development Board be axed, or has the newly-found support come to their aid? If it were none of those things, would it be the temporary


employment or youth employment programmes or schools, hospitals or roads that would be cut?
It is no good arguing for cuts in public expenditure without saying where those cuts are to be made. We are justified in seeking answers to these questions, but as long as the hon. Member for Pembroke goes as far back as 1946 for a quotation from Dalton, I do not believe that we shall get answers from him for dealing with 1978. If Press reports are to be believed, the hon. Member has not made up his mind whether the Government's incentives for industry should be retained. The hon. Member should perhaps have a word with his hon. and learned Friend the Member for Denbigh (Mr. Morgan) or his hon. Friend the Member for Flint, West (Sir A. Meyer). They have been advocating the extension of development area status for parts of their constituencies. If I remember correctly, the hon. Member for Pembroke came with a delegation to see the Minister of State for Industry urging the upgrading of parts of his constituency.
Conservative Members therefore say that cuts and reductions in spending can be made anywhere provided they do not affect their own constituencies. In those cases, the reverse should apply and there should be more public expenditure.
Let us consider the theme of the speeches of the nationalist Members. It was that without some all-embracing detailed blueprint of an economic plan for Wales we shall always remain behind other parts of the United Kingdom and the serious problems will never be overcome. I believe that part of the answer is that the health of the economy in Wales depends on the position in the United Kingdom. Plans for Wales must therefore be kept broad and flexible. They must be kept broad because new developments such as major changes in oil and other commodity prices, or innovations such as micro-miniaturisation of electronic components profoundly change the direction of industrial development.
When the so-called plan was drawn up in 1970 its architects did not envisage a fivefold increase in oil prices. That fact, I believe, justifies my saying that any such plan must be kept flexible.

Mr. D. E. Thomas: rose—

Mr. Jones: I cannot give way. I have indicated that the lack of time, the fact that my speech has been cut short, and the fact that the Government have deliberately chosen to have only one Front Bench speaker, gives us the right to put our case fully now.
Any plan must be flexible, so that central and local Government can respond quickly to problems. The accelerated closures of steelmaking at East Moors and Ebbw Wale Vale could not have been foreseen years ago.
Each part of Wales has its own separate characteristic and special needs. Planning has to be flexible enough to encompass them. I believe that we have the broad framework of objectives to contain inflation and return to full employment. The hon. Member for Caernarvon referred to roads. The roads priorities are clear. They may not be the ones that hon. Members want. They are to proceed with the M4 and to follow that with the A55. As a consolation prize for the hon. Member for Pembroke, let me remind him that whereas 31 miles of motorway were open in Wales last year, there was not even one man digging one hole when we came into office.
The Welsh Development Agency is developing industrial sites at key points or in places of special need, as well as in the community at large. I am glad that even now the sinner repenteth and the hon. Member for Pembroke supports the Welsh Development Agency. The people of Wales, however, should remember that the Agency would not exist if the Conservatives had had their way. It has done considerable work in the construction of new advance factories.
There is a more important factor still. The hon. Member for Caernarvon spoke of empty advance factories. Up to mid-May of this year, 53 factories had been provisionally or formally allocated. That represents 500,000 sq. ft. That would cater for about 2,740 jobs. That is to be compared with 13 factories, 192,000 sq. ft. and 750 jobs in factories that were allocated in the same period last year. This is a significant improvement. Whether one is talking of the work of the Agency or of the Development Board, it is quite clear that the take-up of the factories that we had the foresight to build is now occurring.
Many hon. Members have indicated that part of the problem of evolving and improving the infrastructure is related to the clearance of dereliction. We must take into account the fact that when all the schemes which the WDA is in process of dealing with are completed, at a cost of £36 million, those schemes will have cleared 4,700 acres of derelict land. Whilst we would all want everyone to do more, I do not think that anyone can deny that the WDA has been a success.
Similarly, I believe that the Development Board for Rural Wales is just the same. It started out with 36 factories, as the hon. Member for Cardigan (Mr. Howells) said. Those factories were not let; they were not even subject to any negotiations. But last month, I believe that only seven of them remained empty. The Development Board has published its policy document, after consultation with local authorities. Apart from the factories that have been left, the Development Board has 104,000 sq. ft. of factory space under construction at present, and a further 68,000 sq. ft. is planned.
Time will probably go against me. I think that all hon. Members will have probably received the document from the Development Board showing that those factories are not specifically and solely related to Newtown but are spread out�žCardigan, Lampeter, Tywyn, Brecon, Ystradgynlais, Machynlleth, Welshpool and a number of other places.
I believe that the Development Board, in publishing the policy document and in consulting local authorities, has shown a very good example of practical planning by people on the spot who know local needs and conditions. That is what I want to say about the structure plans and to link this in. I believe that any

sort of regional planning must take account of local views. It must not ride roughshod over the views of the people grappling with problems of their own localities. I do not believe that that is a democratic approach to the subject.
What my right hon. and learned Friend seeks to do, instead, is to make use of the structure plans, to use them as building bricks to do what my hon. Friend the Member for Swansea, East (Mr. Anderson) asked for, namely, planning in a meaningful way, so that the planning leads to action. I do not believe that planning on its own is much use at all. As I have said in many other places, the wallpaper and cupboards of council offices throughout the country must be cluttered up with plans. I have certainly seen far too many of them in my own part of the country.
But these structure plans are to be considered in a coherent way, having regard to the interrelationship of one with the other. This is no abrogation of planning but, rather, a recognition of the realities. We can differ as to our attitudes towards planning. Considerable differences have been expressed today in the debate. But there is no substitute for hard work in providing infrastructure and incentives to stimulate new ventures in Wales. This is what my office, the WDA and the Development Board for Rural Wales, and many others, are doing. We are not handing down, as it were, academic blueprints from on high. This is the way to progress towards the more diversified economic structure for Wales which we are all seeking.
My hon. Friend the Member for Swansea, East did pay particular—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

GENERAL PRACTICE FINANCE CORPORATION

The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): I beg to move,
That the draft General Practice Finance Corporation (Increase of Borrowing Powers) Order 1978, which was laid before this House on 6th June, be approved.
I am presenting this order in conjunction with the Secretary of State for Scotland in exercise of our powers under Section 6(3) of the National Health Service Act 1966. The object of the order is to increase the borrowing powers of the Corporation to £25 million as a top limit.
The National Health Service Act 1966 initially authorised the Corporation to borrow £10 million. This was increased to £18 million with the approval of this House under the General Practice Finance Corporation (Increase of Borrowing Powers) Order 1971. I am now seeking the approval of the House for the further limit.
The order is an indication of the general success of the operations of the Corporation in that it has been able to make a substantial service available to the medical profession over the years, and now the need has come to make more money available.
The General Practice Finance Corporation has its origins in the wide-ranging discussions which took place in 1965 between the British Medical Association and the then Minister of Health, Mr. Kenneth Robinson, about ways of bringing about fundamental improvements in the organisation of general practice in this country. It was common ground at that time between the Government and the representatives of general medical practitioners that doctors were experiencing great and increasing difficulty in raising the capital needed to provide adequate modern surgery premises. We accepted that doctors needed help with the provision of finances and agreed with the profession's proposal that an independent Corporation would be a useful way of providing such assistance.
The 1966 Act received all-party support for the setting up of a General Practice Finance Corporation to make loans available to doctors working in the

National Health Service to provide or improve surgery accommodation for their patients. Members will be pleased to know that the Corporation, since it began business in May 1967, has helped more than 5,000 doctors in Great Britain by making nearly 2,500 loans to a total value of more than £20 million. At the end of the last financial year, the Corporation had made firm offers to lend doctors a further £2 million.
The Corporation is an independent body controlled by its members. The members, who include general practitioners, have legal and financial expertise as well as experience of estate management. Nominations for membership of the Corporation are discussed with representatives of the medical profession and appointments are made by my right hon. Friends the Secretaries of State for Social Services and for Scotland.
I would like to take this opportunity of paying tribute to the chairman, Mr. Stebbings, and his predecessor Sir Frederick Hoare, and to members of the Corporation both past and present for all the work they have done in helping doctors provide better surgery accommodation—an aim which will, I am sure, be welcomed in all parts of the House.
The Corporation is continuing to look for new ways in which it can fully discharge its function of assisting doctors who wish to provide new practice premises while at the same time avoiding unnecessary financial risk. The Corporation is, of course, expected to break even, taking one year with another, and this year showed a small operating profit. The staff of the Corporation have given valuable assistance to the members by keeping the operating costs down to below 4 per cent. of loans made. The activities of the Corporation make virtually no charge on the National Health Service Vote.
The Corporation is responsible for its own financial policy and raises finance by issuing stock and by temporary borrowing, both of which are guaranteed under the terms of the 1966 Act by the Treasury. The stock is taken up by the National Debt Commissioners and temporary borrowing takes the form of a bank overdraft, limited to £1½ million, which allows the Corporation some flexibility in choosing the best time for stock


issues. Nevertheless, the issue and redemption of stock and the limit of temporary borrowing are and will continue to be subject to the approval of the Secretaries of State and the Treasury.
The Corporation has outstanding stock to the value of £16¼ million. Since May 1967, when it first started making loans, it has issued stock amounting to £19½ million, £3¼ million of which has been redeemed. Within the next few months, further stock issues will be required to meet the demand from doctors for loans. With temporary borrowing of up to £1½ million, the limit under which it has been working has become too restrictive.
I have given the House the essential outlines of the purpose of the order and of the way in which the Corporation works. If necessary, I shall, with permission, reply to any points which are raised.

10.5 p.m.

Dr. Gerard Vaughan: That was an extremely disappointing speech. The Minister has not referred to the important matters which the order will affect. I suppose that that, in a way, may account for the lack of enthusiasm with which he read his speech.
The truth is that on this apparently straightforward and simple order, we should be discussing the conditions in which patients are seen and treated by many family doctors. The order affects whether some general practitioners will be able to see their patients in modern properly equipped surroundings or be forced to continue to see patients in old, uncomfortable and often very unsuitable surgeries. As we all know, from going about the country and hearing what they have to say, doctors are in many cases still seeing patients who wait in long queues in the old familiar cartoon surroundings in dilapidated premises. That is not right.
One cannot have modern surgeries unless one has the money with which to build and equip them, and that money is simply not available to general practitioners, especially young general practitioners, or, when it is, it is on terms which the majority of them cannot afford. Thus, they either have to continue to work in poor surroundings or they have to borrow money to build new surgeries

to work on their own, or perhaps go into a group of doctors on conditions which are financially penal. The other course for many of them is to turn to a health centre, with all the drawbacks which they see in such centres.
I agree that the order increases the money available to the General Practice Finance Corporation from £18 million to £25 million, but this is the first increase for seven years and during that time, especially under this Government, the value of money has fallen so disastrously that even the increase which we are now considering does not put the financial position back where it was seven years ago.
Since there is no cost to the National Health Service here, I had hoped that the Minister would seek a larger increase in the amount which the Corporation can raise. Why is there not a greater increase? As he said, this is money which is raised publicly, is then lent, and is later returned.
Not only do we question the amount of money available but we question the use to which the money is put. We consider that it is not as readily available as it ought to be, and that the terms on which it is lent are not sufficiently low. One has only to look at the report of the Corporation�žI must say that we receive these reports very late, and this report is considerably out of date now�žto find that the interest rates range up to as high as 18 per cent.
Such a rate of interest puts a heavy burden on a doctor, especially a young doctor seeking to set up in life. The result is that many doctors, I understand, are now asked to produce between £30,000 and £40,000 to go into a really modern group practice and buy their share. This is beyond them, or, if they do raise it on the Corporation's terms, particularly if they are young people with a family, they have a financial burden hanging over them which is a disadvantage to the way they carry out their practice.
When I was in the West Country recently, I met several groups of doctors. One of them has the land and it has planning permission, but it does not have the money to set up proper premises


and the local authority is trying to persuade this group of doctors to go into a health centre, which they do not wish to do.
I know that health centres are attractive to the philosophy of the Government. They appeal to a tidy bureaucratic mind. It is felt that it is attractive to have the doctor working with the rest of the primary health care team, in the same building. But the same advantages of the primary health care team can be obtained in a proper group practice. There is the advantage that the doctors concerned are able to exercise their skills and professional freedom in a way best suited to the patients in their area. This is important and is something to which the Government pay little regard. In the long run, the way in which doctors work materially affects the standard of care that they are able to offer their patients.
I ask the Minister to think again about the affairs of this Corporation. He says that it has made general progress, but I query that. I think that it has made a small amount of progress, and rather unimaginative progress at that. I ask the Minister to realise that we are discussing effectively the whole pattern of modernising general practice in this country. I ask him to look at the report of the Corporation and at the small number of doctors who have taken up loans from the Corporation. That number is smaller than the number who applied for loans. When the figures are compared, one country with another, it will be seen that there is a small number in this country, a negligible number—seven�žin Scotland and only two in Wales. Why are there discrepancies between one part of the United Kingdom and another? That is not a satisfactory situation.
Further, there are areas which clearly have a need for financial help but to which no loans have been made. We ask the Government to think a little more about the work of the corporation, to accept that the health centre programme should be drastically reduced and to agree that health centres should be provided only in places where they are suitable, namely, in inner city areas. Health centres ought not to be forced upon

groups of doctors who do not want to work in them but who are unable to get premises in any other way.
The Government should develop a proper financial policy for helping general practitioners to modernise their premises and improve their skills. This means allowing the Corporation to raise larger sums than those we are discussing and to make the money much more freely available to general practitioners, particularly the young ones, by offering it at a low rate of interest. On those grounds we are uneasy and dissatisfied with this Statutory Instrument. We think that it shows a lack of imagination, that it is complacent and that it shows that the Government are out of touch with a great deal of what is happening in general practice.

10.14 p.m.

Dr. M. S. Miller: The hon. Member for Reading, South (Dr. Vaughan) and I have in common the fact that both of us are intensely interested in the family doctor section of medicine, among other things, and believe that there should be a greater emphasis on primary care. Where I do not agree with the hon. Gentleman is in his remarks about health centres. I am not at all satisfied with his dismissal of practice in health centres, which he says has drawbacks.
There is only one drawback for the doctor practising in a health centre and that is that it will probably cost him a little more money than it would if he practised from old premises. For the patient there is only one drawback about the health centre, and that is that it may mean that he will have a little further to travel. Everything else is a plus. It is sad that, 30 years after the beginning of the Health Service, we should be having a debate on the necessity to provide reasonable premises from which the general practitioner can practice. I am sure that I am not giving anything away when I say that the hon. Member for Reading, South and I are old enough to remember the days when doctors practised in premises which were deplorable. I am sorry to say that there are still some places where that description applies.
If the only alternative to the removal from deplorable premises were the building of custom-built surgeries for the GP


such as the lion. Gentleman has envisaged�žthe kind of premises which some 25 years ago three of my colleagues and I built in a district in Glasgow�žI would say that he was right in his utter condemnation of the restrictions which my right hon. Friend has implied. Incidentally, I think that the hon. Gentleman is right about the cost today, because those premises in Glasgow cost us about £10,000 25 years ago. But that is not the real alternative.
I contend that the real alternative to premises which are unsuitable for doctors to practise from and for patients to consult them in is the health centre. Contrary to the hon. Gentleman's views, I urge the Minister to push ahead as fast as he can with the building of health centres. I know that there are objections, and I have indicated what I think the two main objections are in each category. But there is no doubt, with all the experience that one can gather from many years of looking at the problem, that it is only in a health centre, with several groups of doctors getting together, that it is possible to provide all the services required for primary care. It is possible to do it only on the basis of four or five groups of doctors getting together, perhaps 20 in all, making the money available not only to have ancillary medical and paramedical staff but also to have social services involved, health visitors and all the adjuncts necessary in practice today.
I know that there are some areas where this is less possible than in others. I do not agree with the hon. Gentleman that health centres should be restricted to inner cities or densely-populated urban areas. I think that they can be erected in parts of the country where the population is not nearly so congested. I know that there might be difficulties, but they can be surmounted.

Dr. Vaughan: But does not the hon. Gentleman agree that health centres are far more impersonal, are less easy places in which doctors can see some kinds of patient, that patients are often upset by them, and that there are problems over the confidentiality of the records?

Dr. Miller: I could not agree that there are any such constraints. There are disadvantages in health centres, but those are not among them. I do not think that there is any problem over confidentiality

or a problem of an impersonal atmosphere. If the hon. Gentleman will come to the Hunter health centre in East Kilbride, I will show him an atmosphere as good as that of any good family hotel. It is an excellent atmosphere, where patients can get a cup of tea and have a chat with their friends. There is no difficulty whatever. Where there are difficulties with health centres is where, for example, a patient has to travel a bit further from home and therefore has to pay a little more for his visit to the doctor.
I think that the custom-built group practice centre still plays a part. Of that I have no doubt at all. But it should not be put against the health centre as the ultimate idea. It should be put against the deplorable, unsatisfactory, and very often insanitary, conditions in which some doctors work. If we looked at it from that point of view, and made sure that any doctor who for whatever reason could not be persuaded to work in a health centre�žI admit that there are some who might not be persuaded�žwas at least persuaded to take part in a group practice centre, and if finance was made available to a few doctors in order to erect a group practice centre, that at least would be a satisfactory compromise.
I again counsel my right hon. Friend not to go too far along the line of making it easier for doctors to opt out of the possibility of health centre practice, because in the immediate and in the long term that is best for the general practice aspect of the medical profession, the ancillary services which go with the GP's and also for the patients themselves.

10.21 p.m.

Mr. Robin Hodgson: I would not want to argue with the hon. Member for East Kilbride (Dr. Miller), particularly on matters affecting medical practice. But as a layman, the two points which occur to me about a health centre�žto be fair, the hon. Gentleman mentioned one of them�žis that the people in our society who use the medical services the most are mothers with young children and the elderly and the more elderly they are, the more they need to go to the doctor. Yet these are the people who find travelling the most difficult of all. The hon. Gentleman mentioned the problem of travelling, and that is not a difficulty to be skipped over


lightly. I believe that it is a very grave difficulty, particularly for an increasing number of very elderly people.
The hon. Gentleman also tends to underestimate the fact that the basic medical relationship in this country is the doctor-patient, a one-on-one, relationship, rather than the patient-group practice of doctors relationship. I would have thought that the concept of an individual patient dealing with an individual doctor was a fairly fundamental part of our medical organisation. However, I take the points which the hon. Gentleman made.
I should like to begin with a plea to the Minister about the explanatory note, This is ground which we have covered before with regard to other Statutory Instruments. The explanatory note on this Instrument states:
This Order raises the maximum aggregate amount which may be borrowed by the General Practice Finance Corporation whether by the issue of stock or temporarily to twenty-five million pounds. The amount was previously fixed at eighteen million pounds by S.I. 1971/382.
We could have guessed most of that from the title of the Statutory Instrument. Either we should have explanatory notes which tell us something new and novel or we might just as well scrub them. The only interesting thing which we learn from this one is the existence of the previous Instrument, passed in 1971. It might interest more of our colleagues if we had explanatory notes on this and other Statutory Instruments which were more explanatory of the purpose of the Instrument as opposed to merely repeating the title.
The timing of the debate has already been briefly touched on by my hon. Friend the Member for Reading, South (Dr. Vaughan). We are debating this Instrument at the very worst possible time of of the year, because if one looks at the most recent annual report of the GPFC, which covers the year ending 31st March 1977, one will see that it was issued on 5th July 1977. Presumably the statistics for the year ending 31st March 1978 are due out within the course of the next couple of weeks. Indeed, if one looks at the date of the signatories of the assistant secretaries in the Department in London and Scotland, one sees that last year's re-

ports were signed on 14th and 15th June. Therefore, there must be one which is just about to emerge. It would have made our deliberations a little more meaningful and helpful, and our comments a little more pertinent, had we been able to hold back this Instrument until we received the report for the year ending 31st March 1978.
The other matter that I wanted to take up concerned the financial management. My hon. Friend referred to the rates of interest being charged. But in respect of this last year for which we have full statistics, the Corporation raised money on three different occasions. It raised £250,000 on each occasion, at 14½ per cent. in May 1976, at 14½ per cent. in July 1976, and at 15¾ per cent. on 11th October 1976. Over the same period it changed the rates of interest that it was charging to 15½ per cent. on 7th May, 16½ per cent. on 13th September, and 18 per cent. on 8th October. That means that on 11th October it raised money in the market place at 15¾ per cent., when only two days earlier it had increased its basic lending rate from 16½ per cent. to 18 per cent. That is a differential of some 2¼ per cent. and, even for a Corporation designed to break even year on year, that seems a quite substantial variation and, as my hon. Friend the Member for Reading, South said, at the highest rate, the interest rates represent a very considerable burden for a young doctor.
In that connection, I was interested to see in Table 6 of appendix B in the annual report that, although the Corporation made a loan of £10,667 at a rate of 18 per cent., in fact no loans had been made. I cannot see how the number of loans can be nil and the sum of £10.667 is being loaned out. That appears to be a minor discrepancy which I hope the Minister will be able to clear up for us.
The other area of interest is the scope of what is available for grant under the scheme. Again, I was interested in the tables in the appendix, which are very full and informative, to see the subheading E "conversion, repairs and improvements", and I wondered what was covered by "improvements". I should have thought that one of the matters on which the hon. Member for East Kilbride and I could agree was that in all modern


practices there was a great need for permanent fixtures to ease and help administration�žfiling equipment of one kind or another�žand I wondered whether this kind of improvement qualified for assistance by ways of loans under the provisions of the Corporation. It is most infuriating to patients to have to wait while records are found and collected and to wait in waiting rooms while searches are made and checks are being run on their previous clinical histories. If it were possible to make loans for improvements of this kind, it would be extremely helpful.
The report is less informative about the average life of a loan. We see that there is a total of some £13.4 million in loans outstanding and that repayments are £650,000 in the year in question. One can calculate from that that it is about a 20-year life for a loan. But I shall be interested to know what variation there is in the life of loans that are granted, whether they are all fixed and for the same term or are sufficiently flexible in their terms to enable doctors at various stages of their careers to a take on loans of this kind. A doctor may be 55 years of age and in the last 10 or 15 years of his career. Are the terms of loans sufficiently flexible to allow him to take advantage of the facilities of this scheme?
I underline what was said my my hon. Friend the Member for Reading, South about the variations between different regions, especially between the different countries. My hon. Friend talked about variations in grants. The additional point that I make is to draw attention to the difference between inquiries and applications. In England, about four-fifths of inquiries eventually became applications. In Scotland, less than one-fifth do. I know that the numbers are very different, but about 200 of 250 inquiries become applications in England, but only seven out of 36 do in Scotland. There is a considerable regional discrepency on which we should appreciate the Minister's comments.
It would be helpful in future to produce some statistical averages showing the population in each area in order to get some idea of the number of loans made per doctor population and per patient population. In this way we could see whether there were any discrepancies in the treatment afforded to the different regions of the country.
I underline the point made by my hon. Friend the Member for Reading, South. While the scheme is worth while and is helping to develop general practitioner care, which we all agree is very important, it is only a fleabite, and there is room for a great many more imaginative approaches to broaden and bring up to date the ways in which the loans are made. I look forward to hearing the Minister's response to the points that we have made.

10.32 p.m.

Mr. Ronald Brown: I want to follow what the hon. Member for Walsall, North (Mr. Hodgson) said, but I do not wish to go too far into the statistical issue. I am more concerned with the human side.
I intervene because the Minister came to my constituency 18 months ago, and tramped around with me in most inclement weather to count the number of general practices in my area and to take the opportunity of looking at them. My right hon. Friend will remember the deplorable premises that he saw. Many of them were deplorable�žwe even saw one with barbed wire outside it. Those premises are still there—and it is 18 months since he looked at them.
I intervene to ask him whether there is any possible chance�žor danger�žthat any of this extra £7 million might come to the doctors in my area because they practise in such terrible premises. Will he find out before the end of the debate how much of the previous £18 million came into my area? Then he might ask himself how the doctors spent it on those deplorable premises.
My right hon. Friend came, he saw, he was impressed, and then he went away again. Will anything be done? We are fighting, and rowing and arguing and nothing is happening. If my right hon. Friend thinks that I will sit here and accept this Statutory Instrument unless I get some assurances, he is wrong. I shall call a Division. Eighteen months is long enough to wait. In that lime there has been no action from his Department to put matters right.
I know that things are just as bad as they were 18 months ago. Recently I took a television team around my area.


It is exactly as it was before, and we recorded it as such. I find the attitude of the Department extraordinary. There are enough civil servants to have brought forward a plan for some crash action by now to put right the appalling circumstances existing in my area. It is no good going to the Family Practitioner Committee, because that is a complete waste of time.
The Minister should have been able to satisfy himself about the so-called emergency service that runs in my area. The emergency service in my area is the doctor. When the hon. Member for Walsall, North talks about the one-on-one relationship, he should realise that in my area it is on the end of a telephone—802–2066, and anybody comes. I have never heard such rubbish in my life as when he talks about the one-on-one relationship. In my area we do not get it.

Mr. Hodgson: That is the ideal. That is what we are aiming for�žnot what we are actually at. The fact that we are not at that situation is one of the reasons that we are dissatisfied with the organisation of the National Health Service at present.

Mr. Brown: The hon. Gentleman is wrong. In some areas there is a one-on-one relationship. In Bromley there is a delightful one-on-one relationship, and that is also the case in Blackheath where my right hon. Friend the Minister lives, and in Dulwich. But in Hackney, South and Shoreditch, which my right hon. Friend has visited, it is more comfortable in the local betting shop than it is in the doctor's surgery. There should be telecommunication between the betting shop and the surgery. The betting shop is warmer, nicer and also has music.
My right hon. Friend saw what was happening and I should like him tonight to tell me what he has done about the situation. What proposals is he putting forward to put the matter right? I have had a long-standing row with the area health authority, the Family Practitioner Committee and the whole caboosh. My right hon. Friend also knows that I am rather displeased with the chairman of the regional health authority whom he has just reappointed. To have given that

gentleman a knighthood in addition seems to be about as far as one can go to be rude and offensive to a parliamentary colleague.
I shall not vote for this order tonight unless I have from the Minister a categorical undertaking that he will come down to my area and examine these general practitioner conditions and see that some urgent action is taken. I do not want him to institute a long, two-year inquiry. Two days will be enough, and I want to see some action.
Another problem is that my area health authority has a closure syndrome. It takes the view that the National Health Service could be a wonderful service, but the only problem is the patient�žand the authority is trying to get rid of them. If only that were done, one could build a beautiful Health Service. My right hon. Friend has already assisted the authority by closing two hospitals. He has closed one permanently and claims to have saved £1 million. I have not yet seen the rewards that have flowed from that saving. Perhaps I shall soon be asking him to justify where that £1 million went when he closed that hospital against my objection.
My right hon. Friend then changed the use of another hospital, and even that is a disaster. Hackney Hopsital is a disgrace. He knows what an appalling state it is in. What is his Department doing about the matter? He has more civil servants to the square foot than I care to count. Are any of them doing anything apart from looking after their pension rights? It is about time my right hon. Friend understood that areas such as mine should be closely examined and dealt with seriously.
We are dealing with a modest order which, until I heard my right hon. Friend's remarks, I supported. I am sure that this order is an excellent way of going about the matter, but my right hon. Friend must not pretend that there is no problem in my area. I hope he will assure me that he is facing up to the problem in Hackney, South and Shoreditch. He understands the problem, and I want to know what he intends to do about it.

10.38 p.m.

Mr. Moyle: We have had an extremely wide-ranging debate on a very


limited order. Some of the points seem to have dealt with matters well outside the scope of the order, but I am sure, Mr. Deputy Speaker, in view of your wise supervision of the debate, that that was not the case and that it was merely an aberration on my part that I considered it to be so. I shall try to deal to the best of my ability with the points raised in the debate, although I have not had a great deal of notice of some of them.
I was surprised to hear the hon. Member for Reading South (Dr. Vaughan) attack health centres. Certainly the Government have no intention of reducing the health centre programme. Indeed, we desire to expand the programme as fast as we can persuade general practitioners of the wisdom of practising in them. I stress the word "persuade" because the hon. Gentleman said that health centres should not be forced on general practitioners and we have made no attempt to do so. In fact, we have no powers to do so. A general practitioner is an independent contractor. He is not an employee of the Health Service. He can be part of a group practice, he can practise in his own front room, or he can practise in the ganger's hut to which my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) was referring.
The whole object of area health authorities, if they wish to get GPs into a health centre, must be to persuade them. One of the problems is that after a group of GPs have been persuaded to go into a centre one or two of the leaders of the group may die or retire and different attitudes may develop among the rest. On other occasions, there may be personality clashes so that when the centre is ready for occupation the GPs find it difficult to agree to move in and the centre can stay empty for some time. I mention this problem to convince the hon. Member for Reading, South that there is no compulsion in these matters.
I was surprised when the hon. Gentleman said that health centres should be confined to inner city areas. Some of the best health centres that I have seen were those in rural areas of Northern Ireland which I visited when I was the Minister of State at the Northern Ireland Office. As my hon. Friend the Member for East Kilbride (Dr. Miller) said in his

good defence of health centres, there is no reason to believe that they are a technique for solving the general practice problems of inner city areas only.
The hon. Member for Reading, South eventually turned his attention to the order, but it was difficult to follow some of his criticisms because he said that, given the fall in the value of money, the upper limit for borrowing that the Government were seeking would not put the situation back to where it was in 1971.
I do not understand that criticism because until 1971 the Corporation was entitled to borrow up to £18 million without coming to the House for further authorisation. It has substantially used up that power and now wants power to borrow more money�žup to £25 million. That is the Corporation's figure. There is no question of offsetting inflation. That is the figure required to allow the Corporation to carry on with its activities. The hon. Gentleman asked why we did not give the Corporation more power; but the power in the order is all the Corporation wants.
In addition, the hon. Gentleman should bear in mind that if we increased the limit the time within which the Corporation would need to come back to the House to account for its activities would be extended still further. There would be less accountability of the Corporation to the House.
I entirely agree with 'what my hon. Friend the Member for East Kilbride said, even when he mentioned one or two weaknesses in the health centre system. There are strengths and weaknesses in everything and, on balance, the Government see health centres as a sound proposition for the development of general practice within the community. They are purpose built and there is nothing to prevent a one-to-one relationship. In most of the centres that I know, the patients are those of a particular doctor. Of course, if there is an emergency the doctor's colleagues can give cover, but that happens in group practices and even in small partnerships.

Dr. Vaughan: Will the Minister be discussing the high rates of interest? He should not discuss the total sum without discussing the high rates of interest which will materially alter the amount that is required.

Mr. Moyle: I shall deal with that. I admit that the one area in which the Corporation is criticised occasionally by members of the profession relates to the high rates of interest. The hon. Gentleman made a plea that rates of interest should be lower. However, rates of interest are a function of the money market. The Corporation must have regard to that in its interest rate policy and the way in which it charges interest rates. The alternative to interest rates that follow the market are subsidies to hold down the interest rate. Subsidies would lead to increased public expenditure, which I know is the last thing that the hon. Gentleman would want to incur. He will readily see that there is no alternative but to follow the money market.
The Corporation attempts to offset interest rates by borrowing in small amounts when interest rates are low in an attempt to ensure that it can take advantage of a fall in interest rates when that occurs. The hon. Member for Walsall, North (Mr. Hodgson) quoted 18 per cent., but the current rate of interest charged on loans is now down to 13 per cent. as a result of the policy that I have been describing. I think that that answers a number of the questions asked by the hon. Member for Walsall, North.
Broadly speaking, loans are for 20 years at fixed rates of interest, or until such time as the junior member of the partnership reaches the age of 65 years, whichever is the earlier date.
It seems that the relationship of loans made to inquiries received is much more to do with the flow of business than in gaps in demand in any one country in the United Kingdom. Although in the year that the hon. Member for Walsall, North quoted there were 36 inquiries made in Scotland which resulted in only six loans, in the following year ending 31st March 1978 there were eight inquiries and eight loans. That does not signify anything much because in Wales in the same period there were nine inquiries and 10 loans. In England there were 195 inquiries and 212 loans. It seems that it is very much a matter of the flow of business. I shall consider the matter to ascertain whether there is a further explanation.

Mr. Hodgson: It is good of the right hon. Gentlemna to produce the figures, but if the debate had taken place at a later stage we would have had the figures ourselves. That underlines the inappropriateness of the debate taking place now. Is the right hon. Gentleman satisfied that the 20-year loan policy has the flexibility to meet the doctors' needs? Is there not an argument for having a more flexible approach?

Mr. Moyle: At present the 20-year loan approach must be sufficiently flexible to meet the desires of the profession. No doubt there are doctors who would make suggestions for alterations, but on the whole we do not get any substantial criticism of the operations of the Corporation from the profession other than the level of interest rates, which is a function of the money markets and the general economy.
As for the timing of the debate, the object is not to debate the annual report of the Finance Corporation but to meet the Corporation's desire to increase its borrowing limits. It is knocking hard against the limits that were laid down in the previous order. That is what controls the timing of the debate.

Mr. Hodgson: It is all very well for the right hon. Gentleman to say that this is not an inappropriate time for the debate because we are talking only about the extension of the Corporation's borrowing limit. However, this is a question of parliamentary control, which means that we review the Corporation's operations and the effectiveness of its work. We have no figures that are less than 15 months out of date. I do not consider that to be a satisfactory way of reviewing the efficiency of the Corporation before we decide whether to extend its borrowing requirement, as the hon. Member for Hackney, South and Shoreditch (Mr. Brown) has already said.

Mr. Moyle: The timing turns on the Corporation's need for a higher borrowing limit. This is the controlling factor. It would be ideal if we could combine the latest flow of figures with the order raising the borrowing limit but these matters do not always work in that way.

Dr. Vaughan: Does not the right hon. Gentleman accept that he should have


made available the figures that are in his possession? He knew that we would wish to discuss the function of the Corporation before authorising an increase of its borrowing limits.

Mr. Moyle: I have given the figures for the inquiries received and loans relating to each country in the United Kingdom. I have given that factual information and the amounts borrowed. Therefore, I have attempted to plug the gaps in the knowledge of the House for the purpose of the debate.
My hon. Friend the Member for Hackney, South and Shoreditch is understandably upset about the standard of general practitioner services in his constituency. Indeed, I had an opportunity of seeing for myself when I visited Hackney 18 months ago. There have been certain improvements in the general approach towards inner city areas. My hon. Friend will appreciate that the problem in his constituency is a problem in inner city areas generally. Often the conditions that he finds in his constituency are repeated in other parts of London and in inner city areas in Liverpool, Manchester and other great provincial cities.
Action hs been taken since my visit. The Department is taking a full part in the partnership areas, which have been set up by my right hon. Friend the Secretary of State for the Environment, in developing policies and services to attract back the population. But the problem is intractable and will not be solved quickly.
As a result of my visit to Hackney, I came to the conclusion that the general practitioner services in the area were inadequate and that the social services were under considerable strain. Therefore, one of the first actions was to increase the bed norm for acute beds in the area, because hospitals in that part of London will have to bear a greater strain than was forecast for the general run of the country.
In addition, Barts is using a health centre in Hackney for training its medical students in general practice. That has been a development since my visit. I am talking off the cuff, because I did not have notice that my hon. Friend intended to raise this matter. However,

I shall write to him with more precise details of this arrangement. Of course, it means that general practitioner services in Hackney have been strengthened.
There is a fairly vigorous debate within the medical profession and health administration generally on how the problem of general practitioner services in the inner city areas should be solved. One school of thought believes that these services should be directly strengthened. Another school of thought believes that it will be difficult to strengthen these services and that we should develop the services of the hospitals to fill the gaps which general practice seems incapable of fulfilling adequately. That matter has not been resolved. Fairly strong views are held on either side.
I agree that Hackney Hospital is not attractive, but I have every confidence that the nucleus hospital on the site of the Eastern Hospital will be developed and that building will start in the not too distant future.
Obviously, with inadequate general practitioner services in the Hackney area, not only are the deputising services used, but there seems to be a deliberate attempt to try to put as much of the general practitioner services on the deputising services as possible. Since my visit to the area we have engaged in intensive consultations with the medical profession, and a code of practice has now been agreed by the profession, by the Department and by Ministers for application to all general practitioners. I advise my hon. Friend to get hold of a copy of the code of practice and make sure that the general practitioners in his area observe it. If they do not, the matter can be drawn to the attention of the family practitioner committee which is now under a compulsion from its professional association to take disciplinary action against a general practitioner who fails to observe the arrangements for using deputising services as laid down in the code.
Although I agree with my hon. Friend the Member for Hackney, South and Shoreditch that there is a great deal more to be done before a proper general practitioner service can be said to exist in his part of London, there is no doubt that some action has been taken as a result of my visit. Progress has been made


towards the solution of the general practitioner problem in inner city areas in general and in his area in some respects. I hope he will on that basis appreciate that there is some good will.

Mr. Ronald Brown: I am grateful to my right hon. Friend for identifying these matters for me. Is he aware that he gave me an undertaking when it was agreed to close the hospital in my area that the concomitant of that would be the injection of funds into St. Leonard's Hospital for the improvement of certain departments such as the X-ray department and the outpatients department? Is he further aware that the area health authority is now arguing that since it believes that the hospital has a life of only five years it is not worth spending that money? While he says things in this House in all honesty and sincerity, there is a big difference between what he says and what happens "on site". Will he investigate this matter to ascertain where the communication breaks down? The authority is not planning to spend the money that my right hon. Friend assures me will be spent.

Mr. Deputy Speaker (Sir Myer Galpern): Order. The hon. Member is going rather wide. He knows full well that this matter is entirely outwith the scope of what we are discussing. I have been generous in allowing the Minister to deal with it, but the subject that the hon. Member is raising is more suitable for an Adjournment debate than for question and answer with the Minister during a discussion about an increased loan.

Mr. Ronald Brown: On a point of order, Mr. Deputy Speaker. May I enlighten you? This matter is pertinent to the debate. If the general practitioners had proper facilities and were able to use money in this order they could provide adequate accommodation in my constituency. The hospitals would not then have to be used as they are being used. I am urging the Minister to see whether general practitioners can use the money to avoid the problems with the hospitals.

Mr. Deputy Speaker: I heard the hon. Member discussing the question of the hospitals and so in in the area. Has the Minister finished?

Mr. Moyle: I was about to conclude on the question of St. Leonard's Hospital. In view of your ruling, Mr Deputy Speaker, I had better tell my hon. Friend that I shall look into the matter and leave it at that.
My hon. Friend asked about resources for general practitioners in his area. One can lead a horse to water, but one cannot make him drink. I suspect that a number of the general practitioners we have been discussing this evening and whose premises we inspected 18 months ago do not want to drink. That is the basic problem against the background that they are independent contractors.

Question put and agreed to.

Resolved,
That the draft General Practice Finance Corporation (Increase of Borrowing Powers) Order 1978, which was laid before this House on 6th June, be approved.

ST. NICHOLAS HOSPITAL, PLUMSTEAD

Motion made, and Question proposed.
That this House do now adjourn.—[Mr. Bates.]

10.58 p.m.

Mr. John Cartwright: I am grateful for this chance of raising the subject of the St. Nicholas Hospital Plumstead, which has been threatened by a variety of rationalisation proposals for the past seven years.
At the outset, may I say how much I regret the absence of my right hon. Friend the Secretary of State. I know that because of his personal involvement in the case he wanted to reply to the debate. It is a matter of great regret that his presence in hospital prevents him from so doing.
St. Nicholas is not, as are most other threatened hospitals, a small run-down unit in a decaying area. On the contrary, it is a 300-bed district general hospital serving the greater part of my constituency, one of the few areas of inner London to have a growing population.
The story begins in late 1971, when the South-East Metropolitan Regional Hospital Board announced a plan to develop the Brook as the district general hospital for the Woolwich area and to rationalise


services at St. Nicholas. This rationalisation, like all the others which were to follow, simply meant cutting the services provided to my constituents. St. Nicholas was to become a complementary community hospital providing a few bits of minor surgery and out-patient services under the general umbrella of the Brook. There were widespread public opponents of this scheme, and it died with the regional hospital board in 1974.
However, no sooner had the new National Health Service administrators settled into their spacious new offices than we were once again being told that the area had too many hospital beds. In an unofficial discussion document produced in December 1975, the Greenwich and Bexley Area Health Authority suggested scrapping all but 20 of the 287 acute beds at St. Nicholas and adding 87 for psycho-geriatric care and a further 120 for mental illness.
The regional health authority went still further. It wanted to remove all the acute beds and to replace them with 100 for geriatrics and 87 for psychogeriatrics. The area health authority took little notice of the public opposition in drawing up its formal consultation document, issued in November 1976.
Faced with the unyielding mathematical dictatorship of the regional bed norm, they decided that acute beds had to be cut. The two super-colossal prestige hospitals, Queen Mary's, Sidcup, and Greenwich District, were sacrosanct, and the choice for the chop therefore lay between the Brook and St. Nicholas.
The Brook had the advantage of massive new investment in the recent past, plus the siting of the regional units for neurology, cardiothoracic and neuro surgery. The AHA therefore decided that
The retention of acute services at St. Nicholas Hospital cannot be justified.
However, the discussion document did enter one caveat. If the regional units were to leave the Brook the whole question of the future of the two hospitals would have to be re-examined. In what has become one of the most quoted statements in the discussion document, the AHA conceded:
This is acknowledged to be perhaps the most difficult area for recommendation and decision, particularly as St. Nicholas Hospital,

sited within a densely populated area and with direct access to Thamesmead, is from the geographical viewpoint, in an excellent location.
In other words, a hospital ideally sited to meet the needs of a genuine local community was to be closed in order to direct patients further afield.
Faced with the total opposition of a community, the AHA hesitated. On 25th May 1977, it issued a statement referring to the
public reaction generally and particularly the support for the retention of St. Nicholas Hospital.
As a result, the AHA asked its officers to examine the possibility of retaining at St. Nicholas general medicine, general and orthopedic surgery, gynaecology and maternity beds, together with the geriatric unit.
However, on 12th July there was yet another U-turn, when the area authority confirmed its previous policy of total closure of all the beds at St. Nicholas. This decision was rubber-stamped by the regional health authority within a week, and the problem then landed on the desk of my right hon. Friend the Secretary of State.
To his credit, my right hon. Friend received a number of deputations and he also visited Plumstead to see for himself not only the hospital but the area that it serves. As a result, he wrote to the chairman of the regional health authority on 13th December 1977, saying:
I do not believe it can be right to close this hospital and I am unwilling to do so.
He went on:
It seems to me that the best course is to link St. Nicholas with Greenwich District Hospital and provide at St. Nicholas a viable acute service of, say, 50 medical and 50 surgical beds together with an out-patient unit and daytime casualty service.
He added that it would be
advantageous to concentrate other services at St. Nicholas.
He proposed the retention of obstetrics and the gynaecology unit.
In his public statement issued on 14th December 1977, my right hon. Friend justified his decision by saying:
St. Nicholas is a valued hospital, well situated to service a community whose population is growing. It is in Plumstead where social conditons are poor and there are many old people living in bad housing. It is also central tor Thamesmead, a locality of industrial development.


The local reaction to this decision was one of quiet satisfaction. At last, a Cabinet Minister had listened to ordinary people rather than anonymous officials. At last, patients were being seen as real people in need and not just decimal points in the lunatic logic of the bed norm formula.
Not surprisingly, the Health Service mandarins were less pleased. In fact, they were furious. They claimed that St. Nicholas in its new form would be no more than a second-class hospital and that it would cost at least £1 million to bring it up to standard, thus giving ample proof of their policy of deliberate neglect of the hospital over the years.
So we had deadlock. The area health authority wanted to shut the hospital; the Secretary of State wanted it kept open. Suddenly, help appeared on the horizon. Galloping to the rescue, like the US Cavalry in the last reel of those well-loved Westerns, came the regional health authority, clutching a so-called compromise formula. It turned out to be a very strange compromise. It kept the hospital open, but only just. The 235 acute beds were to be cut to just 20 for minor day surgery, plus another 20 to 25 for the use of GPs. There were to be minor casualty facilities and the possibility at some unspecified date of a psychogeriatric unit, first suggested in 1975.
With a sigh of relief which was audible all the way from the Elephant and Castle to Plumstead High Street, my right hon. Friend fell on this plan as the best way of getting himself off an increasingly embarrassing hook. It was produced by the regional authority on 20th April but by 4th May the Secretary of State had accepted it—lock, stock and psycho-geriatric unit. What my right hon. Friend has so far failed to explain is how this pale shadow of a hospital can possibly provide the "viable acute service" which he believed was needed last December.
How will it help with the poor social conditions? What contribution can it make to the growing population? What will it do for the many old people in bad housing? How can the needs of local industry be met by minor casualty facilities?
The medical staff at the hospital are quite convinced that the compromise cannot and will not work. The surgeons discredit the idea of day surgery being undertaken at an isolated hospital, possibly by unsupervised junior staff. The local GPs have dismissed as "unwanted" the proposed general practitioner beds. The geriatrician believes that the services for the old will be substandard.
Perhaps the most damning rejection of the whole idea came from the area health authority itself in November 1976 when it withdrew its own earlier proposal to make St. Nicholas a community hospital. it said then:
the combination of geriatric work, some GP medicine and day surgery…would not, of itself, constitute a viable hospital for in-patients. From a medical and nursing staff viewpoint, very grave doubts have been expressed as to whether the minimum requirements by way of recruitment would be achieved.
Yet it is just this role that my right hon. Friend has now imposed upon St. Nicholas. Why? First, because it will save money. The regional health authority suggests that £550,000 a year will be saved by dismembering St. Nicholas. The latest available figures show that the cost per in-patient day at St. Nicholas is £34.88 compared with £36.56 at Greenwich District and £41.82 at the Brook. In other words, the beds to be closed are currently the least costly to operate. As always, the figures are totally one-sided.
We are not told what would be the capital or running costs of the regional authority's proposed psychogeriatric unit. They will obviously eat substantially into the savings. Nor are we told what is to happen to the rest of the St. Nicholas buildings if only 80 beds are to be kept in use However, there is a clue in the region's assumption that £125,000 will be saved by transferring staff from rented offices to vacated hospital buildings. That would mean giving up all the space that is now rented at Marlowe House, Sidcup, and Morgan Grampian House, Woolwich, amounting to 25,000 square feet. That we can seriously contemplate turning purpose-built hospitals into offices seems to be a sad commentary on the present priorities of our National Health Service.
The second reason for this massive cut-back at St. Nicholas was underlined


as recently as this week by my right hon. Friend the Secretary of State when he again claimed that the main problem facing the area was the over-provision of acute beds. I very much doubt whether those of my constituents who are waiting for operations would agree, particularly when the downgrading of St. Nicholas will remove at a stroke over 200 acute beds. Faced with a cut of this magnitude the question must arise: what will happen to all the patients now being treated at St. Nicholas? The beds to be lost are not empty. They are full of warm bodies.
If the area is so seriously overburdened with acute beds one would expect waiting lists to be insignificant. Yet the latest available figures show 363 people awaiting admission to St. Nicholas for general surgery. Compared with 311 five years previously, that indicates no slackening of demand. The total number on the St. Nicholas waiting list is now 488 and there is no obvious slack to be taken up at the neighbouring hospitals, with 506 people waiting for beds at Greenwich District and 392 at the Brook.
Although waiting times have certainly improved, for general surgery they still range from three months at Greenwich District Hospital to seven months at St. Nicholas. The scrapping of so many beds at St. Nicholas can hardly fail to make those lists longer still.
This is the central core of the argument. Despite all the thousands of words that have poured out from every Health Service level about the need to cut services in Greenwich and Bexley, no one has yet produced any assessment of the end result on the people who matter, the patients. The beds that are to go are not now empty; they are fully used. Their removal must therefore mean a cut in the number of inpatients being treated in the Greenwich and Bexley area.
I know that my right hon. Friend denied this in a radio programme earlier this week, but he should look again at the sums. I had some calculations done for me which show that it is physically impossible to treat the number of inpatients dealt with in 1976 with the number of beds that will be left after the cuts at St. Nicholas and elsewhere.
Assuming that the remaining beds are 90 per cent. occupied, I am advised that

there will be a shortfall of 33 in general medicine, 61 in general surgery, 21 in gynaecology, and 42 in orthopaedic surgery, making a total deficiency of 157 beds. Put another way, the reduced number of beds available will be sufficient to take only 5,400 fewer patients than were treated in 1976.
I have deliberately been generous in assuming a 90 per cent. bed occupancy. At 85 per cent., which is much more likely, the shortage of beds rises to 211, and the shortfall of patients treated goes up to 6,780. The shortage of beds revealed in these calculations is roughly equivalent to the number to be lost at St. Nicholas, which is why the future of this hospital is so important to so many people. I hope that my hon. Friend will not give the easy answer that the shortage of beds can be made good by cutting the time spent in hospital. That would assume an improvement in primary care and community health services which is just not happening.
I repeat that this is the central question, which I hope my hon. Friend will try to answer. What is to happen to the patients who are now being treated at St. Nicholas when their beds have gone? I hope my hon. Friend will not seek refuge in the antiseptic anonymity of the regional bed norm. I am concerned about real flesh and blood human beings who need hospital care.
Two other issues arise. St. Nicholas is frequently on call for the whole Greenwich district when the hospitals are full. At present, for example, it is accepting emergency cases because the operating theatres at the Greenwich District Hospital have been closed by the unfortunate industrial dispute there. Clearly, that facility will be removed with the downgrading of St. Nicholas. Where will the emergencies go then?
Secondly, the area health authority made it clear in November 1976 that it would want to re-examine the future of St. Nicholas again if the special regional services were removed from the Brook. It therefore regarded the closure of St. Nicholas as being provisional. In a Written Answer on 26th October 1977, I was assured by my right hon. Friend the Minister of State that the regional health authority was not currently proposing the


transfer of these specialties. However, on 26th May this year, I was told in another Written Answer from my right hon. Friend that the future of these units was being examined by the regional medical committee with a view to putting proposals to the regional health authority. I must say that there will be very considerable suspicion and cynicism if these regional units are removed from the Brook when it is too late to re-open the future of St. Nicholas.
I have raised a number of detailed questions. I realise that my hon. Friend may not be able to reply to them all. Nevertheless, I hope that answers will be forthcoming quickly, because, after seven years of talk and double talk and twists and turns, the people of Plumstead and the staff of the hospital are entitled to some straight answers on these vital questions.
Finally, I underline again the total opposition of the medical staff to the current plan for St. Nicholas. If it is imposed, it will be against their advice, and they do not believe that it can provide an acceptable level of service. Nor are they willing to co-operate in a phased rundown of services. If the cuts are forced through, therefore, I believe that there is a real risk of a total withdrawal by all the present consultants. On that ground alone, I believe that my right hon. Friend should think again, even at this late stage, and honour the public commitment he gave last December to retain the viable acute service at St. Nicholas.

11.14 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I must first apologise to my hon. Friend the Member for Woolwich, East (Mr. Cartwright) that I am replying to this debate. My right hon. Friend the Secretary of State intended to do this himself in view of his personal involvement in the discussions which led up to his decisions last May. Unfortunately, as my hon. Friend has acknowledged, the Secretary of State is now in hospital him-self and cannot be here tonight. I apologise for him.
I welcome my hon. Friend's action in raising the subject of St. Nicholas Hospital tonight in the House and giving me

the opportunity to clarify how the decisions were taken and why my right hon. Friend has agreed to the change of use of this hospital. I must also congratulate my hon. Friend on the skilful and balanced way in which he has presented the case for maintaining the present level of services at this hospital.
The reduction of services at St. Nicholas Hospital must be seen in the context of the provision of health services in the South East Thames region as a whole and in the Greenwich and Bexley area. My right hon. Friend has made it very clear that we are determined to achieve a much greater measure of fairness in the distribution of resources and move towards much greater equality of access to health care. To do this there needs to be redistribution of resources not only between regions but within regions, as some of the biggest inequalities are between over-provided and under-provided areas in the same regions. My right hon. Friend has asked regional health authorities to assess resource targets for areas to provide a measure of relative needs. I am sure that the House and my hon. Friend would not wish me to spend time now in explaining how these targets are assessed.
The principles adopted are those recommended by the Resource Allocation Working Party and have been explained to the House on previous occasions. I should make it clear, however, that we do not believe that targets worked out in this way can be used without modification in allocating resources, particularly to areas and districts. There are a number of factors which cannot be fully taken into account. For example, housing, environmental health, employment and even transport facilities may have relevance to the needs for health care. My hon. Friend emphasised a number of these points in his quotation from the Press notice of December last year.
We should also like to develop a more accurate measure of morbidity. Accordingly, we have told the authorities that they should not seek to apply mechanistically a formula or a predetermined rate of change from existing allocations towards targets. The pace of change must depend on the ability of above-target areas to rationalise services without unacceptable disruption to the existing level of provision or to teaching or other specialist


needs. Nevertheless, my right hon. Friend has said that he expects to see significant progress towards the redistribution of revenue resources. This is our general policy.
The South East Thames Regional Health Authority has calculated targets for its areas which show that there is a wide disparity between the present resources available to those areas. Lambeth, Southwark and Lewisham teaching area is £28 million above target; Greenwich and Bexley is £6 million above target; while Kent is £27 million below target and East Sussex £7 million below target. These targets are, of course, based on catchment population and not just resident population. Even allowing for the crude nature of mathematical targets, there can be no doubt that there needs to be substantial redistribution of revenue within this region.
My right hon. Friend is engaged in discussions about how quickly, and to what extent, expenditure in Lambeth, Southwark and Lewisham teaching area can be reduced without damage to essential teaching and specialist needs and without unacceptable disruption to existing services. The House, I know, would not wish me to dwell on this aspect of the situation but would prefer me to concentrate on the Greenwich and Bexley area, and, in particular, on St. Nicholas Hospital.
The central problem facing this area, as my hon. Friend recognised, has been the over-provision against national standards of acute beds. The construction in this area of two new hospitals over a period of years left the area with over 300 acute beds more than national standards would indicate it needs. The area health authority and the regional health authority, after prolonged consultation, submitted to my right hon. Friend a plan for concentrating services in the area and this joint plan included a proposal to close St. Nicholas Hospital altogether. As my hon. Friend knows, my right hon. Friend visited the area and spent some time at St. Nicholas Hospital. He has met staff of the hospital, the community health council, and has, I know, had discussions with my hon. Friend. He also considered the representations made to him by local organisations and petitions and letters

signed by individual members of the public.
Last December my right hon. Friend announced that he did not believe it could be right to close this hospital and that he was unwilling to do so. He agreed that it was exceptionally welt sited in a locality where the population is expected to increase and where it provides effective and valued service to the local community. At that time, my right hon. Friend gave no specific undertakings about the future use of the hospital. However, he made it clear then that there was scope for a significant reduction in the number of acute beds at the hospital, and he said clearly that he could see no justification for retaining a full accident and emergency service in view of the major accident and emergency departments a short distance away at the Brook and the Greenwich District Hospitals.
He asked the health authorities to consider whether a practicable plan acceptable to both authorities could be prepared on the basis of retaining at St. Nicholas Hospital a viable acute medical and surgical service, the obstetric and gynaecological unit, out-patient department and day-time casualty service. This proposal was linked with a request to the authorities to consider the practicality of transferring geriatric provision fom the Memorial Hospital to St. Nicholas Hospital and closing the Memorial Hospital, and with the closure of the British Hospital for Mothers and Babies.
The area health authority considered these proposals carefully, and came to the view that it would be wrong to transfer the geriatric services from the Memorial Hospital to St. Nicholas Hospital. The authority told my right hon. Friend that the necessary ward adaptation would involve further capital cost of approximately £500,000 and that even then the environment would inevitably not equal the standard of care at the Memorial Hospital. The area health authority regards the continuing care services for the elderly at the Memorial Hospital as amongst the best in the region and wishes to see them developed still more in the future. The authority could not accept that these services should be transferred to accommodation at St. Nicholas Hospital, which could not be as satisfactory.
On maternity provision, the authority did not consider that the retention of the


obstetric beds at St. Nicholas was desir able as the ward is sub-standard and uneconomical of staff. Paediatric medical cover is not satisfactory and the unit is not approved for midwifery training. The authority also wished to correct the imbalance in maternity beds between the Greenwich district and Bexley district. The area health authority's view was still that the sensible course in the situation it was facing would be to close St. Nicholas Hospital.
The regional health authority, however, after its own officers had analysed the situation again, felt that the strong local case for the continuation of hospital services on the St. Nicholas site should be met. Accordingly, the regional health authority proposed a compromise and suggested that St. Nicholas Hospital should change its role to become a community hospital having out-patient and minor casualty facilities, theatre and the supporting services for day surgery, 20 to 25 general practitioner medicine beds and also retain its two geriatric wards of 41 beds. The authority also suggested that as soon as practicable a psychogeriatric day centre should be established on the St. Nicholas site.
My right hon. Friend accepts the view of the regional health authority that the proper function of St. Nicholas Hospital is to be a community hospital providing treatment in the local community for those patients who do not need the full resources of the district general hospital. It really is not practicable to retain in a single district three district general hospitals, and it is obviously essential that full use is made of the new facilities at Greenwich District Hospital.
In this connection, I think there may be some misunderstanding about what a community hospital is. I know my hon. Friend would not object to a community hospital. I think that his objection is to the facilities which are provided in it. The simplest definition that I can quote is in our planning guidelines which we sent out in March of this year to area and regional health authorities. These guidelines comment on the standards set out in our two priorities documents of the past two years:
…a community hospital should be regarded as a local hospital which…it is intended to retain to provide services for patients living locally who do not need the

full specialist facilities of a DGH; does not form part of a DGH complex; provides services for patients under the care of general medical practitioners as well as patients under the care of hospital consultants (precise arrangements for the management of medical care are for local discussion); is not confined to one specialty; where appropriate and practicable, provides, among other services, rehabilitation and continuing care of elderly patients, including the elderly severely mentally infirm.
I know that local people and local industries and organisations in Plumstead and Thamesmead think highly of the accident and emergency service at St. Nicholas. But there are major accident and emergency facilities at both Greenwich District Hospital and the Brook Hospital. Much has been said about the time it can take an ambulance to take patients to these hospitals. Even at the most pessimistic assessment, the time cannot be regarded as unacceptable by national standards.
The day-time casualty service will provide treatment for minor injuries and this will minimise the inconvenience to patients who suffer such injuries, whilst those who need the full resources of a major accident and emergency department can be taken by ambulance to where such facilities are available. There have been difficulties in manning the accident and emergency unit at St. Nicholas Hospital, and it really is better for patients for services to be concentrated so that reliable cover in fully-equipped departments can be provided. This is more important than a small saving in time in getting a patient to an accident and emergency unit, particularly as ambulance crews are trained in first aid measures.
On obstetric services, my right hon. Friend fully recognises that many mothers would prefer to have their babies near to home. It is understandable. But the retention of a small maternity unit at St. Nicholas is not necessary to provide for the number of births in the district and concentration of maternity facilities in hospitals where the full resources of modern medicine, including paediatric care, are available is in accord with professional opinion and national policy. It would not be realistic to leave gynaecological provision on its own once the maternity service is concentrated and, therefore, retention of the obstetric and gynaecological service at St. Nicholas is not justified.
My right hon. Friend is satisfied that by making full use of the new hospitals in the area, supplemented by keeping the hospital as a community hospital, a good service can be provided for my hon. Friend's constituents. Clearly the reduction of acute beds will have some effect on waiting lists at the other hospitals. The area health authority will need to consider some changes in bed provision at Greenwich District Hospital and the Brook Hospital and ensure that full and intensive use is made of the facilities at these hospitals.
My hon. Friend has mentioned figures comparing the utilisation and costs of hospitals in the district. I do not believe that it would be helpful for me to follow him in these sorts of comparisons. So much depends on the mix of specialties and case load that comparisons based on statistics of individual hospitals can often be misleading.
We recognise that there will inevitably be transitional problems in changing the role of the hospital, particularly in resolving medical staffing difficulties. It is for the area health authority to work out, in consultation with its advisory committees, community health council and the staffs of the hospitals affected, the right solutions to these problems. I know that some clinicians have expressed doubts

about the viability of the plan—a point emphasised by my hon. Friend—but the problems are still being considered by the various professional advisory committees and it should not be impossible for the difficulties to be resolved in these local discussions. However, I take note of my hon. Friend's point, which is a matter of practicality, which will obviously affect the final outcome of the discussions.
Given the firm objective of retaining an effective hospital, albeit with a reduced number of beds, as a community hospital, these problems can surely be overcome.
My right hon. Friend believes that the authority will make every effort to establish St. Nicholas as a viable and effective community hospital. We feel confident that the authority will be helped in this task by the affection my hon. Friend's constituents have for their local hospital and the enthusiasm they have displayed in the "Save St. Nicholas" campaign. St. Nicholas' Hospital has been saved, but the best way now of making sure that it continues is to support it in its new role and show just how effective a community hospital can be in meeting the needs of the local community.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes past Eleven o'clock.